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I use an experiment to test whether economics experiments that have explored the relationship between cognitive ability and several important economic behaviors have biased estimates because they fail to account for the impact of differences in intrinsic motivation. I find that monetary incentives do not significantly improve subject performance on the types of questions that are commonly used to measure cognitive ability. I also find that estimates of the relationships between cognitive ability and strategic reasoning, trust, and risk aversion are not significantly different whether cognitive ability is measured with or without monetary incentives. Consistent with the existing literature, subjects with higher cognitive ability demonstrate higher levels of strategic reasoning and they tend to be more trusting; however, in contrast to some prior studies, they are not more risk tolerant.


© 2018 Matthew P. Taylor

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