Mental Models and Learning: The Case of Base-Rate Neglect

Ignacio Esponda, Emanuel Vespa and Sevgi Yuksel

University of California at San Diego, Economics Working Paper Series from Department of Economics, UC San Diego

Abstract: We experimentally document persistence of suboptimal behavior despite ample opportunities to learn from feedback in a canonical updating problem where people suffer from base-rate neglect. Our results provide insights on the mechanisms hindering learning from feedback. Importantly, our results suggest mistakes are more likely to be persistent when they are driven by incorrect mental models that miss or misrepresent important aspects of the environment. Such models induce confidence in initial answers, limiting engagement with and learning from feedback. We substantiate these insights in an alternative scenario where individuals involved in a voting problem overlook the importance of being pivotal. (JEL D83, D91)

Keywords: Economics; Applied Economics; Mental Health; Brain Disorders; Behavioral and Social Science; Mental health; Good Health and Well Being; Commerce; Management; Tourism and Services; Commerce; management; tourism and services (search for similar items in EconPapers)
Date: 2024-03-01
New Economics Papers: this item is included in nep-exp
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Citations: View citations in EconPapers (1)

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