Affiliation:
1. Hanken School of Economics, Helsinki GSE, and University of Stavanger (email: )
2. University of Glasgow, CEPR, IZA, and CesIfo (email: )
3. University of Minnesota (email: )
4. Durham University (email: )
Abstract
How does information about players’ intelligence affect strategic behavior? Game theory, based on the assumption of common knowledge of rationality, does not provide useful predictions. We experimentally show that, in the Prisoner’s Dilemma, disclosure hampers cooperation: higher-intelligence players trust their partners less when playing against someone of lower ability. Similarly, in the Battle of Sexes with low payoff inequality, disclosure disrupts coordination, as higher-intelligence players try to force their most preferred outcome. Instead, with higher payoff inequality, behavior changes and higher-intelligence players concede. We analyze the reasons for these patterns of behavior. (JEL C72, C73, C92, D83, D91)
Publisher
American Economic Association
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