Do emotions affect strategic sophistication?

Abstract

Anger is a negative emotion commonly experienced by all human beings, and it has proven effects on human cognition. Research in this field has shown that cognitive abilities diminish on angry individuals, what has been called “the depth of thought effect”. This paper finds a causal relationship from anger to the strategic sophistication of subjects in a laboratory setting. Our experimental design consists of an emotion-induction treatment and a beauty contest to measure the strategic sophistication of participants. Treated subjects report to be angrier and choose significantly higher numbers in the game, consistent with a negative effect of anger on strategic sophistication.