Abstract
This paper presents a novel approach to analyze human decision-making that involves comparing the behavior of professional chess players relative to a computational benchmark of cognitively bounded rationality. This benchmark is constructed using algorithms of modern chess engines and allows investigating behavior at the level of individual move-by-move observations, thus representing a natural benchmark for computationally bounded optimization. The analysis delivers novel insights by isolating deviations from this benchmark of bounded rationality as well as their causes and consequences for performance. The findings document the existence of several distinct dimensions of behavioral deviations, which are related to asymmetric positional evaluation in terms of losses and gains, time pressure, fatigue, and complexity. The results also document that deviations from the benchmark do not necessarily entail worse performance. Faster decisions are associated with more frequent deviations from the benchmark, yet they are also associated with better performance. The findings are consistent with an important influence of intuition and experience, thereby shedding new light on the recent debate about computational rationality in cognitive processes.
Highlights
Economists have focused on a rational decision maker – the “homo economicus” – to model human behavior
In view of earlier work, we primarily focus on four subjective factors Xgic that might affect deviations from rational behavior: stress related to the current standing, time pressure, fatigue, and complexity
We provide new evidence for the pervasiveness of deviations from rational behavior using data from professional chess players
Summary
Economists have focused on a rational decision maker – the “homo economicus” – to model human behavior. The observation of various deviations of behavior from the benchmark of optimizing rational decision making has motivated an entire field, behavioral economics. Research in this field has identified a plethora of different, partly distinct and partly interacting, behavioral biases, which are related to cognitive limitations, stress, limited memory, preference anomalies, and social interactions, among others. These biases are typically established by comparing actual behavior against a theoretical benchmark, often in simplistic, unrealistic, or abstract settings that are unfamiliar to the decision makers. This connotation often rests on a priori reasoning or value judgments because it is typically even harder or impossible to identify the consequences of deviations from the rational benchmark than the deviations themselves
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