Cognitive ability and observed behavior in laboratory experiments: implications for macroeconomic theory

This paper discusses the relationships between the “measured” cognitive ability of participants and their behavior as observed during laboratory experiments. Based on such relationships, macroeconomic implications of micro-level “boundedly rational” individual behavior will be discussed. The paper also addresses potential problems that arise when insufficient attention is paid to large differences in the measured cognitive ability of participants across several experimental laboratories, influencing the replicability of existing experimental results but also the interpretation of results from cross-country experimental analyses, and proposes to complement participants’ database with individual characteristics.