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Underestimating Learning by Doing

Author

Listed:
  • Samantha Horn
  • George Loewenstein

Abstract

Many economic decisions, such as whether to invest in developing new skills, change professions, or purchase a technology, benefit from accurate estimation of skill acquisition. We examine the accuracy of such predictions by having study participants predict the speed at which they will master unfamiliar tasks. Across three studies involving two types of tasks and two levels of difficulty, we find systematic underestimation of learning, even after receiving feedback. In a fourth study, participants predicting others' performance showed significantly less underestimation, suggesting that projection bias—overreliance on immediate perceptions of effort and difficulty—may drive prediction errors.

Suggested Citation

  • Samantha Horn & George Loewenstein, 2025. "Underestimating Learning by Doing," American Economic Journal: Microeconomics, American Economic Association, vol. 17(4), pages 328-351, November.
    • Handle: RePEc:aea:aejmic:v:17:y:2025:i:4:p:328-51
    DOI: 10.1257/mic.20240141
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    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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