Intelligence in Experimental Economics
Intelligence in Experimental Economics
- Andis SofianosAndis SofianosDurham University
Summary
The economics literature has increasingly been studying how intelligence relates to economic decision-making. This has developed a large literature that aims to understand how cognitive abilities and processes relate to both individual decision-making and strategic interactions. Such studies in the economics literature have predominantly used pattern recognition style tests like the Raven test and measures of cognitive reflection, namely the Cognitive Reflection Test. The literature has uncovered some consistent results, for example, intelligence allows for more patient attitudes and is related to behavior closer to equilibrium play in strategic interactions. There has so far been some mixed evidence in studies that link intelligence with biased decision-making. Meanwhile, there is an ongoing lively debate on how intelligence influences risk attitudes. A theme that appears to resonate in several studies is the link between cognitive ability and error-prone behavior. The key studies across these topics are reviewed and some interesting future avenues for research are outlined.
Subjects
- Micro, Behavioral, and Neuro-Economics