Habits as Adaptations: An Experimental Study

28 Pages Posted: 12 Nov 2018

See all articles by Ludmila Matyskova

Ludmila Matyskova

Bonn University

Brian Rogers

Washington University in St. Louis

Jakub Steiner

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Keh-Kuan Sun

Chapman University - Smith Institute for Political Economy and Philosophy; Washington University in St. Louis

Date Written: November 2018

Abstract

Psychologists emphasize two aspects of habit formation: (i) habits arise when the history of a decision process correlates with optimal continuation actions, and (ii) habits alleviate cognition costs. We ask whether serial correlation of optimal actions alone induces habits or if, instead, habits form as optimal adaptations. We compare lab treatments that differ in the information provided to subjects, holding fixed the serial correlation of optimal actions. We find that past actions affect behavior only in the treatment in which this habit is useful. The result suggests that caution is warranted when modeling habits via a fixed utility over action sequences.

Keywords: Habit formation, rational inattention

JEL Classification: C91, D8, D9

Suggested Citation

Matyskova, Ludmila and Rogers, Brian and Steiner, Jakub and Sun, Keh-Kuan, Habits as Adaptations: An Experimental Study (November 2018). Available at SSRN: https://ssrn.com/abstract=3283004

Ludmila Matyskova (Contact Author)

Bonn University ( email )

Meckenheimer Allee 166
Bonn, D-53115
Germany

Brian Rogers

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Jakub Steiner

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic
+420 605 286 947 (Phone)

HOME PAGE: http://www.cerge-ei.cz

Keh-Kuan Sun

Chapman University - Smith Institute for Political Economy and Philosophy ( email )

One University Drive
Orange, CA 92866
United States

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

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