Depth of reasoning in strategic form games

The depth of human reasoning in interactive decision-making situations can be assessed experimentally in dominance solvable non-cooperative games. We first review the studies employing two sorts of games—the Beauty Contest game and the Investment game. Studies employing these games show that: (i) people typically engage in relatively low levels of strategic reasoning; and (ii) there are individual differences in the depth of reasoning. There are other lines of research employing other types of games and definitions of the depth of reasoning that support the two conclusions above. We argue that these studies underestimate depth of reasoning because it is also necessary to apply a mental model about other players’ reasoning ability in order to play well. Implications of those findings to the theory-of-mind or Machiavellian Intelligence research are discussed.