Intelligence in Experimental Economics

Sofianos, Andis

Abstract

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 behaviour 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 behaviour. The key studies across these topics are reviewed and some interesting future avenues for research are outlined.

Citation

Sofianos, A. (2025). Intelligence in Experimental Economics. Oxford Research Encyclopedia of Economics and Finance

• Other Type: Reference Work Contribution
• Acceptance Date: Sep 5, 2024
• Online Publication Date: Jan 22, 2025
• Publication Date: Jan 22, 2025
• Deposit Date: Oct 3, 2024
• Publisher: Oxford University Press
• DOI: https://doi.org/10.1093/acrefore/9780190625979.013.853
• Keywords: Intelligence; Cognitive Ability; Individual Decision Making; Strategic Interactions; Errors Intelligence & Economics
• Public URL: https://durham-repository.worktribe.com/output/2943447