392 Cohen Hall
Associate Professor of Economics
Title: Cognitive skills and the development of strategic sophistication (paper by Eduardo Fe & David Gill)
Abstract: 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.