Proﬁling strategic decision-makers
50 Pages Posted: 14 Jun 2019 Last revised: 10 Mar 2021
Date Written: March 10, 2021
From CEOs confronting competition to children playing board games, our professional and personal lives are full of strategic decisions. Naturally, while playing the role of a strategist, people diﬀer. To comprehend and analyze how they diﬀer, ﬁrst it is necessary to construct a proﬁling method that classiﬁes strategic decision makers. Developing such a method is the main objective of our article. We follow the game-theoretic perspective, which equates strategizing with backward inducting in dynamic games. We rely on response times to construct the proﬁles. Our method has both descriptive power and predictive power: a subject’s proﬁle resembles her strategic reasoning process and forecasts the likelihood of her correctly backward inducting. To test the proposed proﬁling method, we use data generated by 22 diﬀerent ﬁnite dynamic games from the mobile app Blues and Reds. Our sample consists of 35,826 observations from 6,463 subjects located in 141 countries. We construct the proﬁles of our subjects, and, in a variety of exercises supported by an array of robustness checks, we successfully establish the predictive power of our proﬁling method.
Keywords: proﬁling, strategy, game theory, experimental economics, mobile experiment
JEL Classification: C72, C73, C99
Suggested Citation: Suggested Citation