Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/197134
Authors: 
Cooke, Kevin
Year of Publication: 
2017
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 12 [Year:] 2017 [Issue:] 3 [Pages:] 1307-1348
Abstract: 
I provide axiomatic foundations for a model of taste uncertainty with endogenous learning through consumption. In this setting, uncertainty is over an unobservable, subjective state space. Preference over lottery-menu pairs is sufficient to identify the state space and the learning process. In this model, the agent is viewed as if he learns the utility of an object upon its consumption. This information is used to improve choice from the follow-on menu. This implies a trade-off between consumption value and information leading to experimentation. I provide a behavioral definition of experimentation. While the literature focuses on identifying subjective states through a demand for flexibility, I show that experimentation also (partially) identifies taste uncertainty.
Subjects: 
Taste uncertainty
learning through consumption
experimentation
endogenous learning
subjective state space
decision theory
JEL: 
D11
D83
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/4.0/
Document Type: 
Article

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