Working Papers, Department of Economics, Lund University
Håkan J. Holm
Strategic Decisions: Behavioral Differences Between CEOs and Others
(), Victor Nee
() and Sonja Opper
Abstract: Differences in strategic decision making between CEOs and
other people are interesting since CEOs make important economic decisions
and impact values and norms in society. Our study combines a large
stratified random sample of 199 CEOs of medium-size firms with a carefully
selected control group of 200 comparable people. All subjects participated
in three different incentivized strategic games — Prisoner’s Dilemma,
Chicken, Battle-of-the-Sexes. We report substantial and robust differences
in both behavior and beliefs between the CEOs and the control group. The
CEOs are closer to the socially optimal strategy profile in all games.
Hence, as a group the CEOs out-competes the control-group members and
thereby receives higher average earnings, but not by being smarter (in the
narrow “rationalistic” sense) or more selfish, but by being more
cooperative and less aggressive.
Keywords: Strategies; Efficiency; Nash equilibrium; Incentivized behavior; CEOs; (follow links to similar papers)
JEL-Codes: C70; C93; D22; L26; (follow links to similar papers)
104 pages, December 13, 2016
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