Leadership under the shadow of the future: Intelligence and strategy choice in infinitely repeated games

Abstract

We examine the impact of intelligence on decision making in an infinitely repeated sequential public goods game. Using a two-part experiment, we collect data on subjects’ intelligence and a wide range of preference characteristics, and match these to their full contingent strategy profiles. We find that leaders are less likely to play a free-riding strategy as their intelligence increases. Followers are less likely to play a grim-trigger strategy as intelligence increases. Performing simulations using players’ strategies, we find that groups contribute more and are more profitable as intelligence increases. Our results have implications for the design of policies promoting group success.