Abstract

http://ssrn.com/abstract=1549208
 
 

References (25)



 
 

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


Matthias Sutter


University of Innsbruck; University of Gothenburg - Department of Economics; Institute for the Study of Labor (IZA)

Simon Czermak


affiliation not provided to SSRN

Francesco Feri


affiliation not provided to SSRN


IZA Discussion Paper No. 4732

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.

Number of Pages in PDF File: 57

Keywords: strategic sophistication, beliefs, experiment, team decision making, individual decision making

JEL Classification: C72, C91, C92

working papers series


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Date posted: February 8, 2010  

Suggested Citation

Sutter, Matthias and Czermak, Simon and Feri, Francesco, Strategic Sophistication of Individuals and Teams in Experimental Normal-Form Games. IZA Discussion Paper No. 4732. Available at SSRN: http://ssrn.com/abstract=1549208

Contact Information

Matthias Sutter (Contact Author)
University of Innsbruck ( email )
Universitaetsstr. 15/4
A-6020, Innsbruck
Austria
University of Gothenburg - Department of Economics ( email )
Box 640
Vasagatan 1, E-building, floor 5 & 6
Göteborg, 40530
Sweden
Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Simon Czermak
affiliation not provided to SSRN ( email )
Francesco Feri
affiliation not provided to SSRN
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