Strategic sophistication: attention, intelligence and consistency

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Presenter: Giorgio Coricelli | University of Southern California 

Abstract

I will present the results of three related experimental studies (work in collaboration with Luca Polonio and Joshua Zonca) in which we used eye-tracking to  measure the dynamic patterns of visual information acquisition in games. In a first study, participants played one-shot two-player normal-form games in which either, neither, or only one of the players had a dominant strategy. Our method allowed us to predict whether the decision process would lead to equilibrium choices or not, and to attribute out-of-equilibrium responses to limited cognitive capacities or social motives. Our results suggest the existence of individually heterogeneous-but-stable patterns of visual information acquisition based on subjective levels of strategic sophistication and social preferences. In a second study, we explore the role of gaze patterns and cognitive reflection in explaining heterogeneity in strategic behavior. In particular, we hypothesize that higher levels of cognitive reflection specifically predict the implementation of more sophisticated gaze patterns, which in turn explains higher levels of strategic sophistication. Results show that higher cognitive reflection levels specifically predict the ability to incorporate the counterpart’s incentives in the model of the current game, as well as higher levels of strategic sophistication. Conversely, players exhibiting low cognitive reflection tend to disregard relevant transitions between the counterpart’s payoffs to a greater extent, and such incomplete visual analysis leads to out-of-equilibrium choices. In a third study we used eye-tracking technique to test whether players’ actions are consistent with their expectations of their opponent’s behavior. Participants played a series of two-player 3 by 3 one shot games and stated their beliefs about which actions they expect their counterpart to play (first-order beliefs) or about which actions their counterparts expect them to play (second-order beliefs). Using eye-tracking study we could identify a larger consistency between actions and stated beliefs compared with previous studies, and we could characterize the behavioral rules associated with choice-beliefs inconsistency. Implications for the theories of bounded rationality will be discussed.

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Important note: This is a hybrid event and will also require a password to access the online seminar. Please email the event organiser – Dave Mc Manamon (dave.mcmanamon@sydney.edu.au) for access.