Learning in Games and the Interpretation of Natural Experiments

Drew Fudenberg and David K. Levine

American Economic Journal: Microeconomics, 2022, vol. 14, issue 3, 353-77

Abstract: We show that the treatment effect estimated by standard methods such as regression discontinuity analysis or difference-in-differences may contain a transient "learning effect" that is entangled with the long-term effect of the treatment. This learning effect occurs when the variable of interest is the agents' efforts, when treatment and control correspond to success or failure: success or failure gives agents information about how much their effort matters, and consequently changes the amount of effort they provide after treatment. We examine the impact of the learning effect and when it is likely to be substantial.

JEL-codes: C13 C21 D72 D74 D83 I20 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/mic.20200106 (application/pdf)
https://www.aeaweb.org/doi/10.1257/mic.20200106.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/mic.20200106.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Learning in Games and the Interpretation of Natural Experiments (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmic:v:14:y:2022:i:3:p:353-77

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/mic.20200106

Access Statistics for this article

American Economic Journal: Microeconomics is currently edited by Johannes Hörner

More articles in American Economic Journal: Microeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().