Cognitive sophistication and deliberation times

Carlos Alós-Ferrer, Johannes Buckenmaier

Research output: Contribution to journalArticlepeer-review

Abstract

Differences in cognitive sophistication and effort are at the root of behavioral heterogeneity in economics. To explain this heterogeneity, behavioral models assume that certain choices indicate higher cognitive effort. A fundamental problem with this approach is that observing a choice does not reveal how the choice is made, and hence choice data is insufficient to establish the link between cognitive effort and behavior. We show that deliberation times provide an individually-measurable correlate of cognitive effort. We test a model of heterogeneous cognitive depth, incorporating stylized facts from the psychophysical literature, which makes predictions on the relation between choices, cognitive effort, incentives, and deliberation times. We confirm the predicted relations experimentally in different kinds of games.

Original languageEnglish (US)
JournalExperimental Economics
DOIs
StateAccepted/In press - 2020

Keywords

  • Cognitive effort
  • Cognitive sophistication
  • Deliberation times
  • Depth of reasoning
  • Heterogeneity
  • Iterative reasoning

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)

Fingerprint Dive into the research topics of 'Cognitive sophistication and deliberation times'. Together they form a unique fingerprint.

Cite this