%0 Report
        %A Fe, Eduardo
%A Gill, David
        %T Cognitive Skills and the Development of Strategic Sophistication
        %D 2018
        %8 2018 Feb
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 11326
        %U https://www.iza.org/publications/dp11326
        %X In this paper we investigate how observable cognitive skills influence the development of strategic sophistication. To answer this question, we study experimentally how psychometric measures of theory-of-mind and cognitive ability (or 'fluid intelligence') work together with age to determine the strategic ability and level-k behavior of children in a variety of incentivized strategic interactions. We find that better theory-of-mind and cognitive ability predict strategic sophistication in competitive games.
Furthermore, age and cognitive ability act in tandem as complements, while age and theory-of-mind operate independently. Older children respond to information about the cognitive ability of their opponent, which provides support for the emergence of a sophisticated strategic theory-of-mind. Finally, theory-of-mind and age strongly predict whether children respond to intentions in a gift-exchange game, while cognitive ability has no influence, suggesting that different psychometric measures of cognitive skill correspond to different cognitive processes in strategic situations that involve the understanding of intentions.
        %K cognitive skills
%K theory-of-mind
%K cognitive ability
%K fluid intelligence
%K strategic sophistication
%K age
%K children
%K experiment
%K level-k
%K bounded rationality
%K non-equilibrium thinking
%K intentions
%K gift-exchange game
%K competitive game
%K strategic game
%K strategic interaction