Impetuous Youngsters and Jaded Old-Timers: Acquiring a Reputation for Learning
Year: 1996
Type: article
Abstract: This paper examines individual decision making when decisions reflect on people's ability to learn. We address this problem in the context of a manager making investment decisions on a project over time. We show that in an effort to appear as a fast learner, the manager will exaggerate his own information; but ultimately, he becomes too conservative, being unwilling to change his investments on the basis of new information. Our results arise purely from learning about competence rather than concavity or convexity of the rewards functions. We relate our results to the existing psychology literature concerning cognitive dissonance reduction.
Source: Journal of Political Economy
DOI: 10.1086/262055
Authors: Canice Prendergast, Lars Stole
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2095996041