Plasticity of strategic sophistication in interactive decision-making

Abstract

We propose an experimental eye-tracking study to test how strategic sophistication is shaped by experience in 3×3 two-person normal-form games. Although strategic sophistication has been shown to be linked to a variety of endogenous and exogenous factors, little is known about how it is affected by previous interactive decisions. We show that complete feedback in previous games can significantly enhance strategic sophistication, and that games that in principle provide equivalent learning opportunities lead instead to substantially different learning outcomes. Specifically, only repeated play with feedback of games that emphasize strategic interdependence significantly enhances strategic learning, producing an increase in the frequency of equilibrium play and a shift of attention to the incentives of the counterpart. Moreover, we find that the type of learning underlying newly gained strategic skills can vary substantially across players. Whereas some players eventually learn to visually analyze the payoff matrix consistently with equilibrium reasoning, others appear to use experience with previous interactions to devise simple heuristics of play. Our results have implications for theoretical and computational modeling of learning.