CeDEx Seminar - Peter Schwardmann (University of Munich)

Learning about One’s Self

Abstract:

To better understand why naivet ́e about present bias is so prevalent and persistent, we investigate people’s (in)ability to learn from their past behavior. Participants in our experiment repeatedly decide how much to work on an unpleasant task and are asked to predict their future effort. We find that participants are naively present biased at first, but update their beliefs once they gain experience with the task. Moreover, our methodology allows us to establish that the amount of updating we observe would eliminate naivet ́e in the long run. A treatment in which we vary the nature of the task after an initial experience shows that learning is unencumbered by a change in environment. Taken together, our results suggest that persistent naivet ́e results neither from a fundamental inferential bias nor from an inability to transport newly acquired self-knowledge to new settings. However, participants exhibit another bias: they underestimate their future learning, which may lead to underinvestment in experimentation and a failure to activate self-regulation mechanisms.