Measuring Higher-Order Rationality with Belief Control

TL;DR

This paper introduces a method to measure higher-order rationality by pairing human subjects with fully rational robot players, revealing that rationality levels are more consistent and higher when social biases are minimized.

Contribution

The study presents a novel approach using robot players to isolate and measure individual strategic reasoning capacity free from belief and social biases.

Findings

Subjects show higher rationality with robot players.

Rationality levels are stable across different games.

The method isolates reasoning capacity from social biases.

Abstract

Determining an individual's strategic reasoning capability based solely on choice data is a complex task. This complexity arises because sophisticated players might have non-equilibrium beliefs about others, leading to non-equilibrium actions. In our study, we pair human participants with computer players known to be fully rational. This use of robot players allows us to disentangle limited reasoning capacity from belief formation and social biases. Our results show that, when paired with robots, subjects consistently demonstrate higher levels of rationality and maintain stable rationality levels across different games compared to when paired with humans. This suggests that strategic reasoning might indeed be a consistent trait in individuals. Furthermore, the identified rationality limits could serve as a measure for evaluating an individual's strategic capacity when their beliefs about others are adequately controlled.