Implications of routine-based learning for decision making

Abstract

Various mathematical models have been proposed in the economic literature for the modelling of boundedly rational learning. Each of these models considers one type of learning, like imitation, sat- iscing, trial-and-error or reinforcement learning. This paper combines several types of boundedly rational learning and develops a more gen- eral learning model. Then, the characteristics of this learning model are examined for a quite general decision situation involving risk. It is studied under which conditions learning leads to an expected utility maximising behaviour. Furthermore, it is analysed what kind of devia- tions from the utility maximising behaviour are caused by the dierent aspects of learning. Classication Codes. C44, D83.