Cognitive ability and the effect of strategic uncertainty

Journal article: How is one's cognitive ability related to the way one responds to strategic uncertainty? We address this question by conducting a set of experiments in simple 2 × 2 dominance solvable coordination games. Our experiments involve two main treatments: one in which two human subjects interact, and another in which one human subject interacts with a computer program whose behavior is known. By making the behavior of the computer perfectly predictable, the latter treatment eliminates strategic uncertainty. We find that subjects with higher cognitive ability are more sensitive to strategic uncertainty than those with lower cognitive ability.

Author(s)

Nobuyuki Hanaki, Nicolas Jacquemet, Stéphane Luchini, Adam Zylbersztejn

Journal
  • Theory and Decision
Date of publication
  • 2016
Keywords
  • Robot
  • Bounded rationality
  • Strategic uncertainty
  • Experiment
Pages
  • 101-121
Version
  • 1
Volume
  • 81