Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/145064
Authors: 
Hanaki, Nobuyuki
Kirman, Alan P.
Pezanis-Christou, Paul
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 6029
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.
Subjects: 
multi-armed bandit
reinforcement learning
eureka moment
pay-off patterns
observational learning
JEL: 
D81
D83
Document Type: 
Working Paper

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