Assessing actual strategic behavior to construct a measure of strategic ability

Abstract

Strategic interactions have been studied extensively in the area of judgment and decision-making. However, so far no specific measure of a decision-maker's ability to be successful in strategic interactions has been proposed and tested. Our contribution is the development of a measure of strategic ability that borrows from both game theory and psychology. Such measure is aimed at providing an estimation of the likelihood of success in many social activities that involve strategic interaction among multiple decision-makers. To construct a reliable measure of strategic ability, that we propose to call "Strategic Quotient" (SQ), we designed a test where each item is a game and where, therefore, the individual obtained score depends on the distribution of choices of other decision-makers taking the test. The test is designed to provide information on the abilities related to two dimensions, mentalization and rationality, that we argue are crucial to strategic success, with each dimension being characterized by two main factors. Principal component analysis on preliminary data shows that indeed four factors (two for rationality, two for mentalization) account for strategic success in most of the strategically simpler games of the test. Moreover, two more strategically sophisticated games are inserted in the test and are used to investigate if and to what extent the four factors obtained by simpler games can predict strategic success in more sophisticated strategic interactions. Overall, the collected empirical evidence points to the possibility of building a SQ measure using only simple games designed to capture information about the four identified factors.