IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp8236.html
   My bibliography  Save this paper

Cognitive Ability, Character Skills, and Learning to Play Equilibrium: A Level-k Analysis

Author

Listed:
  • Gill, David

    (Purdue University)

  • Prowse, Victoria L.

    (Purdue University)

Abstract

In this paper we investigate how cognitive ability and character skills influence behavior, success and the evolution of play towards Nash equilibrium in repeated strategic interactions. We study behavior in a p-beauty contest experiment and find striking differences according to cognitive ability: more cognitively able subjects choose numbers closer to equilibrium, converge more frequently to equilibrium play and earn more even as behavior approaches the equilibrium prediction. To understand better how subjects with different cognitive abilities learn differently, we estimate a structural model of learning based on level-k reasoning. We find a systematic positive relationship between cognitive ability and levels; furthermore, the average level of more cognitively able subjects responds positively to the cognitive ability of their opponents, while the average level of less cognitively able subjects does not respond. Finally, we compare the influence of cognitive ability to that of character skills, and find that both cognition and personality affect behavior and learning. More agreeable and emotionally stable subjects perform better and learn faster, although the effect of cognitive ability on behavior is stronger than that of character skills.

Suggested Citation

  • Gill, David & Prowse, Victoria L., 2014. "Cognitive Ability, Character Skills, and Learning to Play Equilibrium: A Level-k Analysis," IZA Discussion Papers 8236, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8236
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp8236.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Didier Fouarge & Trudie Schils & Andries de Grip, 2013. "Why do low-educated workers invest less in further training?," Applied Economics, Taylor & Francis Journals, vol. 45(18), pages 2587-2601, June.
    2. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 411-482, July.
    3. Oliver Schnusenberg & Andrés Gallo, 2011. "On Cognitive Ability and Learning in a Beauty Contest," Journal for Economic Educators, Middle Tennessee State University, Business and Economic Research Center, vol. 11(1), pages 13-24, Summer.
    4. Al-Ubaydli, Omar & Jones, Garett & Weel, Jaap, 2010. "Patience, cognitive skill and coordination in the repeated stag hunt," MPRA Paper 27723, University Library of Munich, Germany.
    5. Gneezy, Uri & Rustichini, Aldo & Vostroknutov, Alexander, 2010. "Experience and insight in the Race game," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 144-155, August.
    6. Emrah Arbak & Marie-Claire Villeval, 2013. "Voluntary leadership: motivation and influence," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(3), pages 635-662, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gill, David & Prowse, Victoria, 2012. "Cognitive ability and learning to play equilibrium: A level-k analysis," MPRA Paper 38317, University Library of Munich, Germany, revised 23 Apr 2012.
    2. Eliana Carranza & Robert Garlick & Kate Orkin & Neil Rankin, 2020. "Job Search and Hiring with Two-sided Limited Information about Workseekers’ Skills," CSAE Working Paper Series 2020-10, Centre for the Study of African Economies, University of Oxford.
    3. Görlitz, Katja & Tamm, Marcus, 2011. "Revisiting the Complementarity between Education and Training – The Role of Personality, Working Tasks and Firm Effects," Ruhr Economic Papers 307, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Katja Görlitz & Marcus Tamm, 2011. "Revisiting the Complementarity between Education and Training – The Role of Personality, Working Tasks and Firm Effects," Ruhr Economic Papers 0307, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    5. Antoni, Manfred, 2011. "Lifelong learning inequality? The relevance of family background for on-the-job training," IAB-Discussion Paper 201109, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    6. repec:zbw:rwirep:0307 is not listed on IDEAS
    7. Benito-Ostolaza, Juan M. & Hernández, Penélope & Sanchis-Llopis, Juan A., 2016. "Do individuals with higher cognitive ability play more strategically?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 64(C), pages 5-11.
    8. Salamanca, Nicolás & de Grip, Andries & Fouarge, Didier & Montizaan, Raymond, 2020. "Locus of control and investment in risky assets," Journal of Economic Behavior & Organization, Elsevier, vol. 177(C), pages 548-568.
    9. Juan M. Benito-Ostolaza & Penélope Hernández & Juan A. Sanchis-Llopis, 2015. "Are individuals with higher cognitive ability expected to play more strategically?," Working Papers 1507, Department of Applied Economics II, Universidad de Valencia.
    10. Judith Offerhaus, 2013. "The Type to Train?: Impacts of Personality Characteristics on Further Training Participation," SOEPpapers on Multidisciplinary Panel Data Research 531, DIW Berlin, The German Socio-Economic Panel (SOEP).
    11. Oren Bar-Gill & Christoph Engel, 2020. "Property is Dummy Proof: An Experiment," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2020_02, Max Planck Institute for Research on Collective Goods.
    12. van Ours, Jan C. & Ward, Shannon & Williams, Jenny, 2015. "Bad Behavior: Delinquency, Arrest and Early School Leaving," CEPR Discussion Papers 10755, C.E.P.R. Discussion Papers.
    13. Maite Blázquez & Santiago Budr�a, 2012. "Overeducation dynamics and personality," Education Economics, Taylor & Francis Journals, vol. 20(3), pages 260-283, March.
    14. Daniel Kuehn, 2019. "Registered Apprenticeship and Career Advancement for Low-Wage Service Workers," Economic Development Quarterly, , vol. 33(2), pages 134-150, May.
    15. Ertac, Seda & Gumren, Mert & Gurdal, Mehmet Y., 2020. "Demand for decision autonomy and the desire to avoid responsibility in risky environments: Experimental evidence," Journal of Economic Psychology, Elsevier, vol. 77(C).
    16. Bonhomme, Stphane & Robin, Jean-Marc, 2009. "Consistent noisy independent component analysis," Journal of Econometrics, Elsevier, vol. 149(1), pages 12-25, April.
    17. Brice Corgnet & Roberto Hernán Gonzalez & Ricardo Mateo, 2015. "Cognitive Reflection and the Diligent Worker: An Experimental Study of Millennials," PLOS ONE, Public Library of Science, vol. 10(11), pages 1-13, November.
    18. Scott A. Imberman, 2011. "Achievement and Behavior in Charter Schools: Drawing a More Complete Picture," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 416-435, May.
    19. Anne McDaniel & Thomas DiPrete & Claudia Buchmann & Uri Shwed, 2011. "The Black Gender Gap in Educational Attainment: Historical Trends and Racial Comparisons," Demography, Springer;Population Association of America (PAA), vol. 48(3), pages 889-914, August.
    20. Radha Jagannathan & Michael J. Camasso & Bagavan Das & Jale Tosun & Sadagopan Iyengar, 2017. "Family, society and the individual: determinants of entrepreneurial attitudes among youth in Chennai, South India," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 7(1), pages 1-22, December.
    21. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2009. "Homo Reciprocans: Survey Evidence on Behavioural Outcomes," Economic Journal, Royal Economic Society, vol. 119(536), pages 592-612, March.

    More about this item

    Keywords

    cognitive ability; character skills; personality traits; level-k; bounded rationality; learning; convergence; non-equilibrium behavior; beauty contest; repeated games; structural modeling; theory of mind; intelligence; IQ; cognition; Raven test;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp8236. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.