Strategic Decisions: Behavioral Differences Between CEOs and Others

Hakan Holm, Victor Nee () and Sonja Opper ()
Additional contact information
Victor Nee: Department of Sociology, Cornell University
Sonja Opper: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden, http://www.sonja-opper.com

No 2016:35, Working Papers from Lund University, Department of Economics

Abstract: Differences in strategic decision making between CEOs and other people are interesting since CEOs make important economic decisions and impact values and norms in society. Our study combines a large stratified random sample of 199 CEOs of medium-size firms with a carefully selected control group of 200 comparable people. All subjects participated in three different incentivized strategic games — Prisoner’s Dilemma, Chicken, Battle-of-the-Sexes. We report substantial and robust differences in both behavior and beliefs between the CEOs and the control group. The CEOs are closer to the socially optimal strategy profile in all games. Hence, as a group the CEOs out-competes the control-group members and thereby receives higher average earnings, but not by being smarter (in the narrow “rationalistic” sense) or more selfish, but by being more cooperative and less aggressive.

Keywords: Strategies; Efficiency; Nash equilibrium; Incentivized behavior; CEOs (search for similar items in EconPapers)
JEL-codes: C70 C93 D22 L26 (search for similar items in EconPapers)
Pages: 104 pages
Date: 2016-12-13
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Strategic decisions: behavioral differences between CEOs and others (2020)
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