Higher cognitive ability is associated with lower entries in a p-beauty contest

Terence C. Burnham, David Cesarini, Magnus Johannesson, Paul Lichtenstein, Björn Wallace

    Research output: Contribution to journalArticlepeer-review

    Abstract

    "Beauty contests" are well-studied, dominance-solvable games that generate two interesting results. First, most behavior does not conform to the unique Nash equilibrium. Second, there is considerable unexplained heterogeneity in behavior. In this work, we explore the relationship between beauty contest behavior and cognitive ability. We find that subjects with high cognitive ability exhibit behavior that is closer to the Nash equilibrium.

    Original languageEnglish (US)
    Pages (from-to)171-175
    Number of pages5
    JournalJournal of Economic Behavior and Organization
    Volume72
    Issue number1
    DOIs
    StatePublished - Oct 2009

    Keywords

    • Beauty contests
    • Cognitive ability
    • Experimental economics
    • Rationality

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Organizational Behavior and Human Resource Management

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