Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/36352
Authors: 
Sutter, Matthias
Czermak, Simon
Feri, Francesco
Year of Publication: 
2010
Series/Report no.: 
IZA Discussion Papers 4732
Abstract: 
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.
Subjects: 
Strategic sophistication
beliefs
experiment
team decision making
individual decision making
JEL: 
C72
C91
C92
Document Type: 
Working Paper

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