Strategic Sophistication of Individuals and Teams in Experimental Normal-Form Games

Matthias Sutter, Simon Czermak and Francesco Feri
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Simon Czermak: Department of Public Finance, University of Innsbruck

No 430, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: We present an experiment on strategic thinking and behavior of individuals and teams in oneshot normal-form games. Besides making choices, decision makers have to state their firstand second-order beliefs. We find that teams play the Nash strategy significantly more often, and their choices are more often consistent by being a best reply to first order beliefs. We identify the complexity of a game and the payoffs in equilibrium as determining the likelihood of consistent behavior according to textbook rationality. Using a mixture model, the estimated probability to play strategically is 62% for teams, but only 40% for individuals.

Keywords: Strategic sophistication; beliefs; experiment; team decision making; individual decision making (search for similar items in EconPapers)
JEL-codes: C72 C91 C92 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2010-02-01
New Economics Papers: this item is included in nep-cse, nep-evo and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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http://hdl.handle.net/2077/21888 (text/html)

Related works:
Working Paper: Strategic sophistication of individuals and teams in experimental normal-form games (2010)
Working Paper: Strategic Sophistication of Individuals and Teams in Experimental Normal-Form Games (2010)
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