Strategic sophistication of individuals and teams. Experimental evidence.

ABSTRACT: Many important decisions require strategic sophistication. We examine experimentally whether teams act more strategically than individuals. We let individuals and teams make choices in simple games, and also elicit first- and second-order beliefs. We find that teams play the Nash equilibrium strategy significantly more often, and their choices are more often a best response to stated first order beliefs. Distributional preferences make equilibrium play less likely. Using a mixture model, the estimated probability to play strategically is 62% for teams, but only 40% for individuals. A model of noisy introspection reveals that teams differ from individuals in higher order beliefs.

SUBMITTER: Sutter M 

PROVIDER: S-EPMC4047612 | biostudies-literature | 2013 Nov

REPOSITORIES: biostudies-literature