Intelligence

The domestic dog has a predisposition to exhibit a social intelligence that is uncommon in the animal world. Dogs are capable of learning in a number of ways, such as through simple reinforcement (e.g. classical or operant conditioning) and by observation.
Dogs go through a series of stages of cognitive development. They are not born with the understanding that objects which are not being actively perceived still remain in existence, called object permanence. This occurs as the infant learns to interact intentionally with objects around it. For dogs, this occurs at roughly 8 weeks of age. Puppies learn behaviors quickly by following examples set by experienced dogs. This form of intelligence is not peculiar to those tasks dogs have been bred to perform, but can be generalized to myriad abstract problems. For example, Dachshund puppies who watched an experienced dog pull a cart by tugging on an attached piece of ribbon in order to get a reward from inside the cart learned the task fifteen times faster than those who were left to solve the problem on their own. Dogs can also learn by mimicking human behaviors. In one study, puppies were presented with a box, and shown that when a handler pressed a lever, a ball would roll out of the box. The handler then allowed the puppy to play with the ball, making it an intrinsic reward. The pups were then allowed to interact with the box. Roughly three-quarters of the puppies subsequently touched the lever, and over half successfully released the ball, compared to only 6 percent in a control group that did not watch the human manipulate the lever. Another study found that handing an object between experimenters who then used the object's name in a sentence successfully taught an observing dog each object's name, allowing the dog to subsequently retrieve the item.
Dogs also demonstrate sophisticated social cognition by associating behavioral cues with abstract meanings. One such class of social cognition involves the understanding that others are conscious agents. Research has shown that dogs are capable of interpreting subtle social cues, and appear to recognize when a human or dog's attention is focused on them. To test this, researchers devised a task in which a reward was hidden underneath one of two buckets. The experimenter then attempted to communicate with the dog to indicate the location of the reward by using a wide range of signals: tapping the bucket, pointing to the bucket, nodding to the bucket, or simply looking at the bucket. The results showed that domestic dogs were better than chimpanzees, wolves, and human infants at this task, and even young puppies with limited exposure to humans performed well. Dr. Stanley Coren, an expert on dog psychology, states that these results demonstrated the social cognition of dogs can exceed that of even our closest genetic relatives, and that this capacity is a recent genetic acquisition which distinguishes the dog from its ancestor, the wolf. Studies have also investigated whether dogs engaged in partnered play change their behavior depending on the attention-state of their partner. Those studies showed that play signals were only sent when the dog was holding the attention of its partner. If the partner was distracted, the dog instead engaged in attention-getting behavior before sending a play signal. Dr. Coren has also argued that dogs demonstrate a sophisticated theory of mind by engaging in deception, which he supports with a number of anecdotes, including one example where a dog hid a stolen treat by sitting on it until the rightful owner of the treat left the room. Although this could have been accidental, Coren suggests that the thief understood that the treat's owner would be unable to find the treat if it were out of view. Together, the empirical data and anecdotal evidence points to dogs possessing at least a limited form of theory of mind.

Info from: http://en.wikipedia.org/wiki/Dog