Common research on decision-making investigates non-interdependent situations, i.e., games against natureʺ. However, humans are social beings and many decisions are made in social settings, where they mutually influence each other, i.e., strategic gamesʺ. Mathematical game theory gives a...

Many papers have reported behavioral biases in belief formation that come on top of standard game-theoretic reasoning. We show that the processes involved depend on the way participants reason about their beliefs. When they think about what everybody else or another "unspeci fied" individual is...

We explore the influence of cognitive ability and judgment on strategic behavior in the beauty contest game (where the Nash equilibrium action is zero). Using the level-k model of bounded rationality, cognitive ability and judgment both predict higher level strategic thinking. However,...