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

Matthias Sutter, Simon Czermak () and Francesco Feri
Additional contact information
Simon Czermak: University of Innsbruck

No 4732, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We present an experiment on strategic thinking and behavior of individuals and teams in one-shot normal-form games. Besides making choices, decision makers have to state their first- and 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: individual decision making; team decision making; experiment; beliefs; strategic sophistication (search for similar items in EconPapers)
JEL-codes: C72 C91 C92 (search for similar items in EconPapers)
Pages: 57 pages
Date: 2010-01
New Economics Papers: this item is included in nep-evo, nep-exp and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published - revised version published as 'Strategic sophistication of individuals and teams. Experimental evidence' in: European Economic Review, 2013, 64, 395-410

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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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