TY - JOUR
T1 - Strategic sophistication of individuals and teams: Experimental evidence
AU - Sutter, Matthias
AU - Czermak, Simon
AU - Feri, Francesco
PY - 2013
Y1 - 2013
N2 - 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.
AB - 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.
U2 - 10.1016/j.euroecorev.2013.06.003
DO - 10.1016/j.euroecorev.2013.06.003
M3 - Article
SN - 0014-2921
JO - European Economic Review
JF - European Economic Review
ER -