Strategic sophistication of individuals and teams in experimental normal-form games

Matthias Sutter; Simon Czermak; Francesco Feri

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. -- strategic sophistication ; beliefs ; experiment ; team decision making ; individual decision making

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Year of publication:	2010 ; This version: 29 January 2010
Authors:	Sutter, Matthias ; Czermak, Simon ; Feri, Francesco
Publisher:	Innsbruck : Univ. of Innsbruck, Inst. für Finanzwiss.
Subject:	Normalformspiel \| Normal-form game \| Spieltheorie \| Game theory \| Entscheidung \| Decision \| Gruppenentscheidung \| Group decision-making \| Experiment \| Schweden \| Sweden \| Entscheidungsfindung \| Führungsentscheidung