The Evolution of Strategic Sophistication | Zendy

Nikolaus Robalino | Zendy; Arthur J. Robson | Zendy

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The Evolution of Strategic Sophistication

Author(s) -

Nikolaus Robalino,

Arthur J. Robson

Publication year - 2016

Publication title -

american economic review

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 16.936

H-Index - 297

eISSN - 1944-7981

pISSN - 0002-8282

DOI - 10.1257/aer.20140105

Subject(s) - sophistication , novelty , economics , element (criminal law) , foundation (evidence) , cognition , microeconomics , computer science , psychology , social psychology , sociology , social science , archaeology , neuroscience , political science , law , history

This paper investigates the evolutionary foundation for our ability to attribute preferences to others, an ability that is central to conventional game theory. We argue here that learning others' preferences allows individuals to efficiently modify their behavior in strategic environments with a persistent element of novelty. Agents with the ability to learn have a sharp, unambiguous advantage over those who are less sophisticated because the former agents extrapolate to novel circumstances information about opponents' preferences that was learned previously. This advantage holds even with a suitably small cost to reflect the additional cognitive complexity involved. (JEL C73, D11, D83)

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