Submission 41
Myopic Behavior in the Laboratory: Backward Reasoning Limitations or Strategic Uncertainty?
panel.2-225 - Floor 1-01
Presented by: Iván Barreda Tarrazona
We investigate whether seemingly myopic behavior in a sequential game arises from limitations in backward reasoning or from strategic uncertainty. Building on our previous laboratory implementation of the Core–Periphery model in Economic Geography with four sequential players, we introduce a new treatment in which only the first decision is made by a human, while subsequent decisions are taken by expected payoff maximizing artificial agents. When strategic uncertainty is removed in this setting, 71% of first movers choose the forward-looking migration decision, compared to 45% in the corresponding treatment with four human de-cision makers. The difference indicates that distrust in others’ rationality, rather than cognitive limitations, drives our previously observed shift toward myopic be-havior as the sequence length, and the corresponding number of human decision makers, increases. Moreover, the advantage of higher cognitive ability and eco-nomics training largely disappears once strategic uncertainty is eliminated. These results highlight the behavioral importance of strategic uncertainty in dynamic coordination environments.