When
Where
Victoria Prowse, Professor of Economics, Purdue University
The Behavioral Economics of Cognitive Skills
Abstract: This talk will explore the interplay between economic behaviors and cognitive skills, such as theory of mind, creativity, judgment and cognitive ability. Drawing on several recent papers, I will discuss how cognitive skills predict strategic behavior and life outcomes. The first paper shows that cognitive ability in adults influences the evolution of play toward Nash equilibrium in repeated strategic interactions. The second paper provides evidence that theory of mind predicts whether children’s reciprocity responds to intentions in a gift-exchange game. The third paper uses rich longitudinal data to show that childhood creativity predicts labor market and educational success. Finally, I will leverage a difference-in-differences approach to show that increases in school spending in the UK improved children’s cognitive skills.
Paper links:
The Creativity Premium: Exploring the Link Between Childhood Creativity and Life Outcomes (working paper)
https://drive.google.com/file/d/1H3hDq2D1HE6evvDLGgWYcIxPlEzP2N15/view
Cognitive Skills, Strategic Sophistication, and Life Outcomes (JPE, 2022)
https://drive.google.com/file/d/13ExSAF2bPZLPuDBuMIfwHhh2_tj5gKNh/view?usp=share_link