Habits as adaptations: An experimental study

Ludmila Matyskova, Brian Rogers, Jakub Steiner and Keh-Kuan Sun

Games and Economic Behavior, 2020, vol. 122, issue C, 391-406

Abstract: When observable cues correlate with optimal choices, habit-driven behavior can alleviate cognition costs. We experimentally study the degree of sophistication in habit formation and cue selection. To this end, we compare lab treatments that differ in the information provided to subjects, holding fixed the serial correlation of optimal actions. We find that a particular cue – own past action – affects behavior only in treatments in which this habit is useful. The result suggests that caution is warranted when modeling habits via a fixed non-separable utility. Despite this sophistication, lab behavior also reveals myopia in information acquisition.

Keywords: Habit formation; Rational inattention (search for similar items in EconPapers)
JEL-codes: C91 D8 D9 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Working Paper: Habits as Adaptations: An Experimental Study (2019)
Working Paper: Habits as Adaptations: An Experimental Study (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:122:y:2020:i:c:p:391-406

DOI: 10.1016/j.geb.2020.04.013

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