A Behavioral Approach to Learning in Economics - Towards an Economic Theory of Contingent Learning
In economics, adjustment of behavior has traditionally been treated as a "black box." Recent approaches that focus on learning behavior try to model, test, and simulate specific adjustment mechanisms in specific environments (mostly in games). Results often critically depend on distinctive assumptions, and are not easy to generalize. This paper proposes a different approach that aims to allow for more general conclusions in a methodologically more compatible way. It is argued that the introduction of the main determinants of learning behavior as situational restrictions into the standard economic model may be a fruitful way to capture some important aspects of human behavior that have often been omitted in economic theory. Based on a simple model of learning behavior (learning loop), robust findings from psychology are used to explain behavior adjustment, and to identify its determinants (contingent learning). An integrative methodology is proposed where the "black box" is not opened, but instead the factors that determine what happens inside, and the limits imposed by theses factors can be analyzed and used for model building. The paper concludes with testable hypotheses about learning behavior in the context of economics.
|Date of creation:||04 May 1999|
|Date of revision:|
|Note:||Type of Document - PDF-File; prepared on IBM PC; to print on PostScript; pages: 31 ; figures: included. Working Paper, Department of Economics, University of St.Gallen, prepared for the EEA Annual Meeting, Berlin Sept. 1998, downloads|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fudenberg, Drew & Levine, David, 1998.
"Learning in games,"
European Economic Review,
Elsevier, vol. 42(3-5), pages 631-639, May.
- Heiner, Ronald A, 1983. "The Origin of Predictable Behavior," American Economic Review, American Economic Association, vol. 73(4), pages 560-95, September.
- Weibull, Jörgen W., 1997.
"Evolution, Rationality and Equilibrium in Games,"
Working Paper Series
489, Research Institute of Industrial Economics.
- V. Crawford, 2010.
"Adaptive Dynamics in Coordination Games,"
Levine's Working Paper Archive
404, David K. Levine.
- Rapoport, Amnon & Seale, Darryl A. & Winter, Eyal, 2002. "Coordination and Learning Behavior in Large Groups with Asymmetric Players," Games and Economic Behavior, Elsevier, vol. 39(1), pages 111-136, April.
- Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, vol. 68(2), pages 1-16, May.
- Vives, Xavier, 1996.
"Social learning and rational expectations,"
European Economic Review,
Elsevier, vol. 40(3-5), pages 589-601, April.
- Ulrich Witt, 2006. "Evolutionary Economics," Papers on Economics and Evolution 2006-05, Philipps University Marburg, Department of Geography.
- Lucas, Robert E, Jr, 1986. "Adaptive Behavior and Economic Theory," The Journal of Business, University of Chicago Press, vol. 59(4), pages S401-26, October.
- Arrow, Kenneth J, 1994. "Methodological Individualism and Social Knowledge," American Economic Review, American Economic Association, vol. 84(2), pages 1-9, May.
- Tversky, Amos & Kahneman, Daniel, 1986. "Rational Choice and the Framing of Decisions," The Journal of Business, University of Chicago Press, vol. 59(4), pages S251-78, October.
- Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-81, September.
- McKelvey, Richard D & Palfrey, Thomas R, 1992. "An Experimental Study of the Centipede Game," Econometrica, Econometric Society, vol. 60(4), pages 803-36, July.
- Tilman Slembeck, 1999. "Reputations and Fairness in Bargaining - Experimental Evidence from a Repeated Ultimatum Game With Fixed Opponents," Experimental 9905002, EconWPA.
- Arrow, Kenneth J, 1986. "Rationality of Self and Others in an Economic System," The Journal of Business, University of Chicago Press, vol. 59(4), pages S385-99, October.
- Camerer, Colin & Loewenstein, George & Weber, Martin, 1989. "The Curse of Knowledge in Economic Settings: An Experimental Analysis," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1232-54, October.
- Hauk, Esther, 1997. "Discriminating to learn to discriminate," UC3M Working papers. Economics 6058, Universidad Carlos III de Madrid. Departamento de Economía.
- James B. Bullard, 1991. "Learning, rational expectations and policy: a summary of recent research," Review, Federal Reserve Bank of St. Louis, issue Jan, pages 50-60.
- North, Douglass C, 1994.
"Economic Performance through Time,"
American Economic Review,
American Economic Association, vol. 84(3), pages 359-68, June.
- Roth, Alvin E. & Erev, Ido, 1995. "Learning in extensive-form games: Experimental data and simple dynamic models in the intermediate term," Games and Economic Behavior, Elsevier, vol. 8(1), pages 164-212.
- Alvin E Roth & J K Murnighan, 1997.
"The rule of information in bargaining: an experimental study,"
Levine's Working Paper Archive
1631, David K. Levine.
- Roth, Alvin E & Murnighan, J Keith, 1982. "The Role of Information in Bargaining: An Experimental Study," Econometrica, Econometric Society, vol. 50(5), pages 1123-42, September.
- John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
- J. Van Huyck & R. Battalio & F. Rankin, 1996. "On the Evolution of Convention: Evidence from Coordination Games," Levine's Working Paper Archive 548, David K. Levine.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpmi:9905001. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA)
If references are entirely missing, you can add them using this form.