Counter Intuitive Learning: An Exploratory Study

42 Pages Posted: 26 Sep 2016  

Nobuyuki Hanaki

Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS

Alan P. Kirman

Aix Marseile University and Ecole des Hautes Etudes en Sciences Sociales; CAMS EHESS

Paul Pezanis‐Christou

University of Adelaide

Date Written: August 08, 2016

Abstract

The literature on learning in unknown environments emphasises reinforcing on actions which produce positive results. But, in some cases, success requires shifting from a currently successful actions to others. We examine, experimentally and theoretically in a very simple framework, how individuals initially learn by exploiting information from the pay-offs of actions taken but also from exploring new actions. We analyse if and how they learn that pay-offs are inter-temporally dependent. We then ran the same experiments but where individuals could observe the actions taken or the pay-offs obtained by others or both. Such observations improved pay-offs if one of the pair had learned to obtain the maximum pay-off.

Keywords: multi-armed bandit, reinforcement learning, eureka moment, pay-off patterns, observational learning

JEL Classification: D810, D830

Suggested Citation

Hanaki, Nobuyuki and Kirman, Alan P. and Pezanis‐Christou, Paul, Counter Intuitive Learning: An Exploratory Study (August 08, 2016). CESifo Working Paper Series No. 6029. Available at SSRN: https://ssrn.com/abstract=2843476

Nobuyuki Hanaki

Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS ( email )

GREQAM
3 Ave Robert Schuman
Aix-en-Provence, 13628
France

Alan P. Kirman (Contact Author)

Aix Marseile University and Ecole des Hautes Etudes en Sciences Sociales ( email )

3 Avenue Robert Schuman,
France

CAMS EHESS ( email )

190-198, avenue de France,
Paris, 75244
France
+33612241766 (Phone)

Paul Pezanis‐Christou

University of Adelaide

No 233 North Terrace, School of Commerce
Adelaide, South Australia 5005
Australia

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