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Learning to hesitate

Ambroise Descamps (), Sébastien Massoni () and Lionel Page
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Ambroise Descamps: Oxera Consulting LLP

Experimental Economics, 2022, vol. 25, issue 1, No 13, 359-383

Abstract: Abstract We investigate how people make choices when they are unsure about the value of the options they face and have to decide whether to choose now or wait and acquire more information first. In an experiment, we find that participants deviate from optimal information acquisition in a systematic manner. They acquire too much information (when they should only collect little) or not enough (when they should collect a lot). We show that this pattern can be explained as naturally emerging from Fechner cognitive errors. Over time participants tend to learn to approximate the optimal strategy when information is relatively costly.

Keywords: Search; Decision under uncertainty; Information; Optimal stopping; Real option (search for similar items in EconPapers)
JEL-codes: C91 D81 D83 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10683-021-09718-7

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