Strategic Thinking in Normal Form Games 

Evidence from experimental studies on iterative models of strategic thinking suggests that individuals’ level of strategic thinking varies randomly across different situations. This paper considers a combination of two systematic sources of variation as a possible explanation. The first source of systematic variation is the choice heuristic employed by non-strategic individuals, which may be a function of salient non-strategic features of strategic situations. The second source of systematic variation is strategic individuals’ level of thinking, which may be a function of the cost and value of thinking in strategic situations. First, I describe and report results from two experiments which are designed to test if non-strategic individuals respond to variation in the salience and position of non-strategic features of strategic situations. The data from the experiments shows that manipulating non-strategic features affects the distribution(s) of participants’ choices, and that the size of this effect depends on the salience of the manipulation. Second, I demonstrate how to create sets of games which keep the two sources of systematic variation constant. These sets of games are distinct from those typically studied in the literature. 

Joint Production and Distribution

Experimental evidence from a variety of bargaining and distribution situations suggests that participants under-utilize their bargaining power, and care about contextual moral principles. In most recent experiments, participants do some work to generate a surplus, before the division stage. The production function used to generate the bargaining surplus is usually additive, and participants’ inputs to production are perfect substitutes, leaving little room for clashing entitlements, moral ambiguity, and conflict. In this paper, I study if manipulating the substitutability of participants’ inputs to production affects bargaining processes, outcomes, and social norms. In a pre-registered online experiment, I manipulate the production function used to transform two participants’ work into money. In one treatment participants’ inputs are perfect substitutes, while in the other treatment participants’ inputs are perfect complements. When inputs are perfect complements, equal divisions of available surplus are more frequent. Neutral observers, who assess the appropriateness of different allocations, reward participants who perform better than their partners. However, manipulation of the production function has no effect on observers’ assessment of allocations. 

(Draft available on request.)