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Habits as Adaptations: An Experimental Study

Author

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  • Ludmila Matyskova

  • Brian Rogers

  • Jakub Steiner

  • Keh-Kuan Sun

Abstract

Psychologists emphasize two aspects of habit formation: (i) habits arise when the history of a decision process correlates with optimal continuation actions, and (ii) habits alleviate cognition costs. We ask whether serial correlation of optimal actions alone induces habits or if habits form as optimal adaptations. We compare lab treatments that differ in the information provided to subjects, holding fixed the serial correlation of optimal actions. We find that past actions affect behavior only in the treatment in which this habit is useful. The result suggests that caution is warranted when modeling habits via a fixed utility over action sequences.

Suggested Citation

  • Ludmila Matyskova & Brian Rogers & Jakub Steiner & Keh-Kuan Sun, 2019. "Habits as Adaptations: An Experimental Study," CRC TR 224 Discussion Paper Series crctr224_2019_113, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2019_113
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp113
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    Cited by:

    1. is not listed on IDEAS
    2. Bartosz Maćkowiak & Filip Matějka & Mirko Wiederholt, 2023. "Rational Inattention: A Review," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 226-273, March.

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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