The Power of Reasoning: Experimental Evidence

Subhasish Dugar and Haimanti Bhattacharya

Working Paper Series, Department of Economics, University of Utah from University of Utah, Department of Economics

Abstract: This paper presents an experimental investigation of how a systematic variation in the cognitive demands on subjects affects the optimal play. The innovation of this paper is the choice of a game, which we call the Game of Position. This is a two-player zero-sum game characterized by a dominant-strategy solution that involves iterative steps of reasoning. The equilibrium play is independent of mutual beliefs of players; hence inability of a subject to play the dominant-strategy unambiguously implies the failure of human reasoning prowess. We alter the two parameters of the game to vary the cognitive constraints, as represented by these steps of reasoning, on players. Our main substantive conclusion is that the frequency of the dominant-strategy play sharply increases as we limit the cognitive demands on players.

Keywords: Non-cooperative game theory; cognition; laboratory experiment (search for similar items in EconPapers)
JEL-codes: C72 C91 D83 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2008
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-gth, nep-hpe and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:uta:papers:2008_20

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