Experience and Expertise in Strategic Behavior

University Of Arizona, Tucson AZ

Investigators

Abstract

In recent years experimental methods have become an indispensable component of economic research. Laboratory experiments are used to test economic theory, to discover the properties of alternative institutional rules, and to assist in the design of new market institutions. A few examples are the design of the FCC spectrum auctions, the design of a new market institution for matching medical interns with hospitals, and the design of new market institutions for the deregulated allocation of electrical power. Laboratory experiments in economics and game theory rest on the premise of "transference", or"parallelism:" the assumption that the behavior of subjects in the laboratory will be the same as the behavior of people in the actual strategic encounters that the experiments are designed to help us understand. If laboratory subjects behave differently, for whatever reason, this would present a challenge for experimental research: theory that failed in the laboratory might perform well in the field, or vice-versa; the properties of a trading rule in the laboratory might be different from its properties in the field; and trading rules designed in the laboratory, and which work well there, may perform poorly in the field. Recent evidence suggests that the behavior of people with expertise in certain kinds of strategic situations may be different than the behavior of people who are "inovices," as laboratory subjects typically are, with little or no experience in the given strategic context. This evidence includes recent research by Walker and Wooders in which leading professional tennis players were found to make strategic decisions that were more in accord with the theory of strategic behavior than the decisions of laboratory subjects who had no prior experience in the strategic situation. The research project consists of experiments designed to study whether, and how, the strategic behavior of experts differs from the behavior of less experienced and less expert decision makers. The experiments will be conducted primarily on the World Wide Web, and they will be designed specifically to provide for the development and identification of varying levels of expertise and the means to identify differences in behavior that are associated with differing levels of expertise. The results of this research promise to provide a better understanding of the role of expertise in strategic behavior and of the strategic contexts in which parallelism can be expected to hold, and to help identify the settings in which Web-based experiments are superior and those in which laboratory experiments are likely to be superior.