Discrete Adjustment to a Changing Environment: Experimental Evidence∗

Abstract

We conduct a laboratory experiment to shed light on the cognitive limitations that may affect the way decision makers respond to changes in their economic environment. The subjects solve a tracking problem: they estimate the probability of a binary event, which changes stochastically. The subjects observe draws and indicate their draw-by-draw estimate. Our… (More)

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Cite this paper

@inproceedings{Khaw2016DiscreteAT, title={Discrete Adjustment to a Changing Environment: Experimental Evidence∗}, author={Mel Win Khaw and Luminita Stevens and Michael Woodford and Fernando {\'A}lvarez and Marty Eichenbaum and Cosmin Ilut and Filip Matějka and Alex Wolman}, year={2016} }