Cognitive reflection in experimental anchored guessing games

Coralio Ballester, Antonio Rodriguez-Moral and Marc Vorsatz

Games and Economic Behavior, 2024, vol. 148, issue C, 179-195

Abstract: The cognitive reflection test or CRT (Frederick, 2005) has been found to be a reliable predictor of the degree of strategic sophistication of subjects in a variety of laboratory experiments. These studies have found that subjects who score higher in the CRT make choices that are closer to Nash equilibrium (i.e., Brañas-Garza et al., 2012). In an extended level-k model with free subjective beliefs, we theoretically decompose the closeness to equilibrium for the class of anchored guessing games introduced in Ballester et al. (2023) into two effects: subjects with a smaller distance to equilibrium must possess a higher reasoning level in the level-k hierarchy or their level-k iteration process must begin from a starting point (called “seed”) that is inherently more advantageously positioned, which translates into the concept of “seed distance” (or both). Our main experimental finding is that subjects with a higher CRT score play closer to equilibrium due to the fact that they iterate more often in their reasoning process (as in Brañas-Garza et al., 2012), yet we find no clear evidence that they have a smaller seed distance. We also find evidence of a learning or adaptation process, which can be characterized by a warm-up phase (in which subjects reduce their seed distance), followed by a learning phase (in which they increase their reasoning level, at a faster rate in subjects with higher CRT) and then a saturation phase in which no further improvements are made.

Keywords: Beliefs; Cognitive reflection; Level-k; Network (search for similar items in EconPapers)
JEL-codes: C91 D90 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0899825624001362
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:148:y:2024:i:c:p:179-195

DOI: 10.1016/j.geb.2024.09.003

Access Statistics for this article

Games and Economic Behavior is currently edited by E. Kalai

More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Catherine Liu ().