IDEAS home Printed from https://ideas.repec.org/p/pur/prukra/1337.html
   My bibliography  Save this paper

How cognitive skills affect strategic behavior: Cognitive ability, fluid intelligence and judgment

Author

Listed:
  • David Gill
  • Zachary Knepper
  • Victoria Prowse
  • Junya Zhou

Abstract

We explore the influence of cognitive ability and judgment on strategic behavior in the beauty contest game. Using the level-k model of bounded rationality, cognitive ability and judgment both predict higher level strategic thinking. However, individuals with better judgment choose the Nash equilibrium action less frequently, and we uncover a novel dynamic mechanism that sheds light on this pattern. Taken together, our results indicate that fluid (i.e., analytical) intelligence is a primary driver of strategic level-k thinking, while facets of judgment that are distinct from fluid intelligence drive the lower inclination of high judgment individuals to choose the equilibrium action.

Suggested Citation

  • David Gill & Zachary Knepper & Victoria Prowse & Junya Zhou, 2023. "How cognitive skills affect strategic behavior: Cognitive ability, fluid intelligence and judgment," Purdue University Economics Working Papers 1337, Purdue University, Department of Economics.
    • Handle: RePEc:pur:prukra:1337
    as

    Download full text from publisher

    File URL: https://business.purdue.edu/research/working-papers-series/2023/1337.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. C. Mónica Capra, 2019. "Understanding decision processes in guessing games: a protocol analysis approach," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 5(1), pages 123-135, August.
    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. David J. Cooper & Ian Krajbich & Charles N. Noussair, 2019. "Choice-Process Data in Experimental Economics," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 5(1), pages 1-13, August.

    More about this item

    Keywords

    cognitive ability; judgment; fluid intelligence; matrix reasoning; beauty contest; strategic sophistication; level-k; experiment; game theory;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    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:pur:prukra:1337. See general information about how to correct material in RePEc.

    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: Business PHD (email available below). General contact details of provider: https://edirc.repec.org/data/kspurus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.