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Article

Cost of Reasoning and Strategic Sophistication

Rady School of Management, University of California, San Diego, CA 92093, USA
Games 2020, 11(3), 40; https://doi.org/10.3390/g11030040
Received: 30 June 2020 / Revised: 19 August 2020 / Accepted: 14 September 2020 / Published: 22 September 2020
(This article belongs to the Special Issue Behavioral Game Theory)
I designed an experiment to study the persistence of the prevailing levels of reasoning across games. Instead of directly comparing the k-level(s) of reasoning for each game, I used cognitive load to manipulate the strategic environment by imposing variations on the subject’s cost of reasoning and their first- and second-order beliefs. Subjects have systematic changes in k-level(s) of reasoning across games. That finding suggests that subjects are responsive to changes in the strategic environment. Changes in k-level(s) of reasoning are mostly consistent with the endogenous depth of reasoning model when subjects are more cognitively capable or facing less cognitively capable opponents. Subjects have cognitive bounds, but often choose a lower-type action due to their beliefs about their opponents. Finally, cognitive ability plays a significant role in subjects making strategic adjustments when facing different strategic environments. View Full-Text
Keywords: level-k reasoning; guessing game; cognitive load; endogenous depth of reasoning; strategic thinking level-k reasoning; guessing game; cognitive load; endogenous depth of reasoning; strategic thinking
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MDPI and ACS Style

Zhao, W. Cost of Reasoning and Strategic Sophistication. Games 2020, 11, 40. https://doi.org/10.3390/g11030040

AMA Style

Zhao W. Cost of Reasoning and Strategic Sophistication. Games. 2020; 11(3):40. https://doi.org/10.3390/g11030040

Chicago/Turabian Style

Zhao, Wanqun. 2020. "Cost of Reasoning and Strategic Sophistication" Games 11, no. 3: 40. https://doi.org/10.3390/g11030040

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