Exploration versus exploitation: A laboratory test of the single‐agent exponential bandit model.

This paper analyzes how individuals resolve an exploration versus exploitation trade‐off in a laboratory experiment. The experiment implements the single‐agent exponential bandit model. We analyze how subjects respond to changes in the prior belief, safe action, and discount factor. We find that sub...

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Detalles Bibliográficos
Publicado en:Economic Inquiry Vol. 62; no. 1; pp. 267 - 287
Autores principales: Hudja, Stanton, Woods, Daniel
Formato: Artículo
Publicado: Wiley-Blackwell Jan2024
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Exploration versus exploitation: A laboratory test of the single‐agent exponential bandit model.
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          Hudja, Stanton
          Woods, Daniel
        affil:
          Department of Economics, University of Toronto, Toronto Ontario,, Canada
          Department of Economics, University of Innsbruck, Innsbruck, Austria
      su:
        Robbers
        Risk aversion
        Exploitation of humans
      sug:
        subj:
          Robbers
          Risk aversion
          Exploitation of humans
      keyword:
        bandits
        continuous time
        experimentation
        exponential bandit model
        bandits
        continuous time
        experimentation
        exponential bandit model
      ab: This paper analyzes how individuals resolve an exploration versus exploitation trade‐off in a laboratory experiment. The experiment implements the single‐agent exponential bandit model. We analyze how subjects respond to changes in the prior belief, safe action, and discount factor. We find that subjects respond in the predicted direction to these changes. However, we find that subjects under‐respond to the prior belief, under‐respond to the safe action, and typically explore less than predicted. Our results suggest that neither risk aversion nor the random termination probability are driving under‐experimentation. Our results are consistent with subjects having incorrect beliefs about exploration.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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