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  5. Strategic Thinking Skills: A Key to Collective Economic Success

American Economic Journal:
Microeconomics

ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)

Strategic Thinking Skills: A Key to Collective Economic Success

  • Syngjoo Choi
  • Seonghoon Kim
  • Wooyoung Lim
American Economic Journal: Microeconomics (Forthcoming)

Abstract

We conduct a large-scale experiment to measure elementary aspects of strategic thinking skills and their linkage to labor market outcomes. Two incentivized measures of higher-order rationality and backward induction are developed. Males’ (females’) strategic thinking skills are positively (negatively) associated with individual labor income. However, among married individuals, strategic thinking skills are significantly and positively associated with their household labor income regardless of gender, highlighting the importance of strategic thinking skills for collective economic success. We argue that the intrahousehold channels encompassing collective labor supply with home-to-workplace spillover and marriage assortative matching offer the most plausible explanation for our findings.

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