Underestimating Learning by Doing

36 Pages Posted: 12 Oct 2021 Last revised: 18 Apr 2024

See all articles by Samantha Horn

Samantha Horn

Carnegie Mellon University

George Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences

Date Written: April 16, 2024

Abstract

Many economic decisions, such as whether to invest in developing new skills, change professions, or purchase a technology, benefit from accurate estimation of skill acquisition. We examine the accuracy of such predictions by having experimental participants predict the speed at which they will master an unfamiliar task. Across three experiments involving two types of tasks and two levels of difficulty, we find systematic underestimation of learning, even after multiple rounds of performance feedback. Additionally, we observe an abrupt drop in confidence, from overconfidence to underconfidence, following initial task experience. Combined, these errors may lead to suboptimal investments in learning opportunities.

Keywords: learning, beliefs, forecasting

JEL Classification: C91, D83, D91

Suggested Citation

Horn, Samantha and Loewenstein, George F., Underestimating Learning by Doing (April 16, 2024). Available at SSRN: https://ssrn.com/abstract=3941441 or http://dx.doi.org/10.2139/ssrn.3941441

Samantha Horn (Contact Author)

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

George F. Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences ( email )

Pittsburgh, PA 15213-3890
United States
412-268-8787 (Phone)
412-268-6938 (Fax)

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