Habits as adaptations: an experimental study

0525424 - NHÚ 2021 RIV US eng J - Journal Article
Matysková, L. - Rogers, B. - Steiner, Jakub - Sun, K.-K.
Habits as adaptations: an experimental study.
Games and Economic Behavior. Roč. 122, July (2020), s. 391-406. ISSN 0899-8256. E-ISSN 1090-2473
EU Projects: European Commission(XE) 770652 - BEHAVFRICTIONS
Institutional support: RVO:67985998
Keywords : habit formation * rational inattention
OECD category: Economic Theory
Impact factor: 1.287, year: 2020
Method of publishing: Open access
https://doi.org/10.1016/j.geb.2020.04.013

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.
Permanent Link: http://hdl.handle.net/11104/0309568