Counter Intuitive Learning: An Exploratory Study
CESifo, Munich, 2016
CESifo Working Paper No. 6029
![](https://cesifo.org/DocImg/cesifo1_wp6029.jpg?c=1689237164)
The literature on learning in unknown environments emphasises reinforcing on actions which produce positive results. But, in some cases, success requires shifting from a currently successful actions to others. We examine, experimentally and theoretically in a very simple framework, how individuals initially learn by exploiting information from the pay-offs of actions taken but also from exploring new actions. We analyse if and how they learn that pay-offs are inter-temporally dependent. We then ran the same experiments but where individuals could observe the actions taken or the pay-offs obtained by others or both. Such observations improved pay-offs if one of the pair had learned to obtain the maximum pay-off.
Behavioural Economics
Empirical and Theoretical Methods