Games and phone numbers: do short term memory bounds affect strategic behavior?
Research in experimental and behavioral game theory has revealed a substantial and persistent degree of heterogeneity in the strategic behavior of real individuals. While the prevailing theoretical explanations of the observed heterogeneity typically invoke underlying differences in beliefs among the population of players, we argue that a further source of heterogeneity may consist in the individuals' different ability to process information, of which short term memory capacity provides a measurable proxy. Research in cognitive psychology has shown that individuals typically differ in their short term memory capacity; furthermore, short term memory capacity provides a fundamental cognitive bottleneck to our ability to process information efficiently and hence seems correlated with performance in a variety of problem solving and reasoning tasks. In this paper we conduct experiments on a set of well-known games whose solution concepts require the application of some paradigmatic forms of strategic reasoning, such as iterated dominance, reasoning about common knowledge and backward induction. We separately conduct standard short term memory tests on our subjects to detect the presence of a correlation between individuals' behavior in the games - here defined in terms of degrees of conformity to the standard game-theoretic prescriptions - and their short term memory score. Our results show the presence of a significant and positive correlation between subjects' short term memory score and conformity to standard game-theoretic prescriptions in the games, thus confirming our hypothesis. While the robustness of our conjecture awaits to be confirmed by further data gathering in more interactive experimental settings, our preliminary results suggest a promising line of inquiry on the interconnections between information processing capacity and strategic behavior
(This abstract was borrowed from another version of this item.)
|Date of creation:||2002|
|Date of revision:|
|Contact details of provider:|| Postal: Via Inama 5, 38100 Trento|
Web page: http://www-ceel.economia.unitn.it
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Schotter Andrew & Weigelt Keith & Wilson Charles, 1994.
"A Laboratory Investigation of Multiperson Rationality and Presentation Effects,"
Games and Economic Behavior,
Elsevier, vol. 6(3), pages 445-468, May.
- Schotter, Andrew & Weigelt, Keith & Wilson, Charles, 1990. "A Laboratory Investigation Of Multi-Person Rationality And Presentation Effects," Working Papers 90-24, C.V. Starr Center for Applied Economics, New York University.
- Abreu, Dilip & Rubinstein, Ariel, 1988. "The Structure of Nash Equilibrium in Repeated Games with Finite Automata," Econometrica, Econometric Society, vol. 56(6), pages 1259-81, November.
- Darryl Seale & Amnon Rapoport, 2000. "Elicitation of Strategy Profiles in Large Group Coordination Games," Experimental Economics, Springer, vol. 3(2), pages 153-179, October.
- Ho, Teck-Hua & Camerer, Colin & Weigelt, Keith, 1998.
"Iterated Dominance and Iterated Best Response in Experimental "p-Beauty Contests.","
American Economic Review,
American Economic Association, vol. 88(4), pages 947-69, September.
- Ho, Teck Hua & Weigelt, Keith & Camerer, Colin, 1996. "Iterated Dominance and Iterated Best-Response in Experimental P-Beauty Contests," Working Papers 974, California Institute of Technology, Division of the Humanities and Social Sciences.
- Camerer, Colin, 1995. "Rules for Experimenting in Psychology and Economics, and Why They Differ," Working Papers 946, California Institute of Technology, Division of the Humanities and Social Sciences.
- Broseta, Bruno & Costa-Gomes, Miguel & Crawford, Vincent P., 2000.
"Cognition and Behavior in Normal-Form Games: An Experimental Study,"
University of California at San Diego, Economics Working Paper Series
qt0fp8278k, Department of Economics, UC San Diego.
- Costa-Gomes, Miguel & Crawford, Vincent P & Broseta, Bruno, 2001. "Cognition and Behavior in Normal-Form Games: An Experimental Study," Econometrica, Econometric Society, vol. 69(5), pages 1193-1235, September.
- Miguel Costa-Gomes & Vincent P. Crawford & Bruno Broseta, . "Cognition and Behavior in Normal-Form Games:An Experimental Study," Discussion Papers 00/45, Department of Economics, University of York.
- Costa-Gomes, Miguel & Crawford, Vincent P. & Broseta, Bruno, 1998. "Cognition and Behavior in Normal-Form Games: An Experimental Study," University of California at San Diego, Economics Working Paper Series qt1vn4h7x5, Department of Economics, UC San Diego.
- Johnson, Eric J. & Camerer, Colin & Sen, Sankar & Rymon, Talia, 2002. "Detecting Failures of Backward Induction: Monitoring Information Search in Sequential Bargaining," Journal of Economic Theory, Elsevier, vol. 104(1), pages 16-47, May.
- Ronald Fagin & Joseph Y. Halpern & Yoram Moses & Moshe Y. Vardi, 2003. "Reasoning About Knowledge," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262562006, December.
- Herbert A. Simon, 1996. "The Sciences of the Artificial, 3rd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691914, December.
- Stahl, Dale II & Wilson, Paul W., 1994. "Experimental evidence on players' models of other players," Journal of Economic Behavior & Organization, Elsevier, vol. 25(3), pages 309-327, December.
- Roberto Weber, 2001. "Behavior and Learning in the “Dirty Faces” Game," Experimental Economics, Springer, vol. 4(3), pages 229-242, December.
- Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, vol. 68(2), pages 1-16, May.
- Nagel, Rosemarie, 1995. "Unraveling in Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 85(5), pages 1313-26, December.
- Ariel Rubinstein, 1997.
"Modeling Bounded Rationality,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262681005, December.
- Maria Giovanna Devetag & Massimo Warglien, 2002. "Representing others' preferences in mixed motive games: was Schelling right," CEEL Working Papers 0208, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
- Eyal Winter & Amnon Rapoport & Darryl A. Seale, 2000. "An experimental study of coordination and learning in iterated two-market entry games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 16(3), pages 661-687.
- Geanakoplos, John, 1994. "Common knowledge," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 40, pages 1437-1496 Elsevier.
When requesting a correction, please mention this item's handle: RePEc:trn:utwpce:0211. 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: (Marco Tecilla)
If references are entirely missing, you can add them using this form.