title: Strategic sophistication of individuals and teams. Experimental evidence.
abstract: Many important decisions require strategic sophistication. We examine experimentally whether teams act more strategically than individuals. We let individuals and teams make choices in simple games, and also elicit first- and second-order beliefs. We find that teams play the Nash equilibrium strategy significantly more often, and their choices are more often a best response to stated first order beliefs. Distributional preferences make equilibrium play less likely. Using a mixture model, the estimated probability to play strategically is 62% for teams, but only 40% for individuals. A model of noisy introspection reveals that teams differ from individuals in higher order beliefs.
authors.affiliation: Department of Public Finance, University of Innsbruck, Universitaetsstrasse 15, A-6020 Innsbruck, Austria ; University of Cologne, Germany.
authors.forename: Matthias
authors.initials: M
authors.lastname: Sutter
authors.affiliation: MCI Management Center Innsbruck, Universitätsstraße 15, A-6020 Innsbruck, Austria.
authors.forename: Simon
authors.initials: S
authors.lastname: Czermak
authors.affiliation: Royal Holloway, University of London, United Kingdom.
authors.forename: Francesco
authors.initials: F
authors.lastname: Feri
keywords: Experiment; Individual decision making; Noisy introspection; Strategic sophistication; Team decision making