The Thrill of Gradual Learning

Faruk Gul, Paulo Natenzon, Erkut Ozbay and Wolfgang Pesendorfer

Journal of Political Economy Microeconomics, 2025, vol. 3, issue 3, 477 - 496

Abstract: We report on an experiment that shows subjects prefer a gradual resolution of uncertainty when information about winning yields decisive bad news but inconclusive good news. This behavior is difficult to reconcile with existing theories of choice under uncertainty, including the Kreps–Porteus model. We show how the behavioral patterns uncovered by our experiment can be understood as arising from subjects’ special emphasis on their best (peak) and worst (trough) experiences along the realized path of uncertainty.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1086/732833 (application/pdf)
http://dx.doi.org/10.1086/732833 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: The Thrill of Gradual Learning (2020)
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:ucp:jpemic:doi:10.1086/732833

Access Statistics for this article

More articles in Journal of Political Economy Microeconomics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().