People in a changing environment must decide between exploiting options they currently favor and exploring alternative options that provide additional information about the state of the environment. For example, drivers must decide between purchasing gas at their currently favored station (i.e.,...

People in a changing environment must decide between exploiting options they currently favor and exploring alternative options that provide additional information about the state of the environment. For example, drivers must decide between purchasing gas at their currently favored station (i.e.,...

Random assignment is insufficient for measured treatment responses to recover causal effects (comparative statics) in dynamic economies. We characterize analytically bias probabilities and magnitudes. If the policy variable is binary there is attenuation bias. With more than two policy states,...

When people learn to make decisions from experience, a reasonable intuition is that additional relevant information should improve their performance. In contrast, we find that additional information about foregone rewards (i.e., what could have gained at each point by making a different choice)...

The general question of how environmental dynamics affect the behavioral interaction in an evolutionary economy is considered. To this end, a basic model of a dynamic multi-sector economy is developed where the evolution of investment strategies depends on the diversity of investment strategies,...