%0 Report
        %A Gill, David
%A Knepper, Zachary
%A Prowse, Victoria L.
%A Zhou, Junya
        %T How Cognitive Skills Affect Strategic Behavior: Cognitive Ability, Fluid Intelligence and Judgment
        %D 2024
        %8 2024 Jul
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 17168
        %U https://www.iza.org/publications/dp17168
        %X We explore the influence of cognitive ability and judgment on strategic behavior in the beauty contest game (where the Nash equilibrium action is zero). Using the level-k model of bounded rationality, cognitive ability and judgment both predict higher level strategic thinking. However, individuals with better judgment choose zero less frequently, and we uncover a novel dynamic mechanism that sheds light on this pattern. Taken together, our results indicate that fluid (i.e., analytical) intelligence is a primary driver of strategic level-k thinking, while facets of judgment that are distinct from fluid intelligence drive the lower inclination of high judgment individuals to choose zero.
        %K cognitive ability
%K judgment
%K fluid intelligence
%K matrix reasoning
%K beauty contest
%K strategic sophistication
%K level-k
%K experiment
%K game theory