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Learning while shopping: an experimental investigation into the effect of learning on consumer search

Published online by Cambridge University Press:  14 March 2025

Ben Casner Open the ORCID record for Ben Casner [Opens in a new window]
Ben Casner*
Affiliation:
The Ohio State University, 410 Arps Hall, 1945 N. High St., Columbus, OH 43210, USA
*
casner.15@osu.edu
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Abstract

In many search environments, searchers are learning about the distribution of offers in the market. I conduct an experiment exploring a broad class of search problems with learning about the distribution of payoffs. My results support the prediction that learning results in declining reservation values, providing evidence that learning may be an explanation for recall. Theory predicts a “one step” reservation value strategy, but many subjects instead choose to set a high reservation value in order to learn about the distribution before adjusting based on their observations. Under-searching in search experiments may stem from a reinforcement heuristic and lack of negative feedback after using sub-optimal strategies.

Keywords

SearchLearningInformation heuristicsSearch experimentsUnknown distributionReinforcement heuristic

JEL classification

L15: Information and Product Quality • Standardization and Compatibility D9: Micro-Based Behavioral Economics‡ D83: Search • Learning • Information and Knowledge • Communication • Belief • Unawareness
Type
Original Paper
Information
Experimental Economics , Volume 24 , Issue 1 , March 2021 , pp. 238 - 273
Copyright
Copyright © 2020 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-020-09659-7) contains supplementary material, which is available to authorized users.

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Supplementary material: File

Casner supplementary material

Online Appendix: Subject instructions for Learning While Shopping
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