Cognitive Ability and the Effect of Strategic Uncertainty

28 Pages Posted: 18 Nov 2015

See all articles by Nobuyuki Hanaki

Nobuyuki Hanaki

Osaka University - Institute of Social and Economic Research

Nicolas Jacquemet

Paris School of Economics (PSE); Université Paris I Panthéon-Sorbonne

Stéphane Luchini

Université Paul Cézanne Aix Marseille, EHESS

Adam Zylbersztejn

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Date Written: November 17, 2015

Abstract

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 x 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.

Keywords: Strategic Uncertainty, Bounded Rationality, Robot, Experiment

JEL Classification: C92, D83

Suggested Citation

Hanaki, Nobuyuki and Jacquemet, Nicolas and Luchini, Stéphane and Zylbersztejn, Adam, Cognitive Ability and the Effect of Strategic Uncertainty (November 17, 2015). Available at SSRN: https://ssrn.com/abstract=2691904 or http://dx.doi.org/10.2139/ssrn.2691904

Nobuyuki Hanaki (Contact Author)

Osaka University - Institute of Social and Economic Research ( email )

6-1, Mihogaoka
Suita, Osaka 567-0047
Japan

Nicolas Jacquemet

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

Université Paris I Panthéon-Sorbonne ( email )

17, rue de la Sorbonne
Paris, 75005
France

HOME PAGE: http://www.nicolasjacquemet.com/

Stéphane Luchini

Université Paul Cézanne Aix Marseille, EHESS ( email )

3, Avenue Robert Schuman
Aix-en-Provence Cedex 1, Aix en Provence 13628
France

Adam Zylbersztejn

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France

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