Discovering Preferences: An experiment and a Bayesian representation

Prof. Louis Lévy-Garboua, Pantheon-Sorbonne University and Paris School of Economics

We study how agents learn their preferences through consumption experience. We propose several models of preference discovery and test them in a novel lab experiment in which subjects make repeated choices, each followed by a consumption experience. We
find evidence of discovered preference which is best explained by myopic predicted utility with exploration behavior where agents are imperfect Bayesian learners { they under-react (over-react) to new information when facing familiar (unfamiliar) goods. We find substantial heterogeneity in exploration behavior which is largely
explained by observables (age, gender, personality traits).

About the speaker
Louis Lévy-Garboua is currently Emeritus Professor of Economics at the Pantheon-Sorbonne University and Paris School of Economics. He is research fellow at the Centre d’économie de la Sorbonne (CES, Paris) and associate fellow at CIRANO (Montreal). He is the Founding Director of the Master program “Economics and Psychology” jointly delivered by Pantheon-Sorbonne and Paris Descartes universities. His research interests cover applied microeconomics, with special attention to behavioral and experimental economics, the theory of choice under risk and uncertainty, education, and cultural economics.

Venue: Conference room

Date: 21 January 2016

Time: 12:30 - 13:30