Experimentation with accumulation

Experimentation with accumulation

We study signal-dependent experimentation in the presence of accumulation and show that the passive-learner's action surprisingly coincides with the experimentor's when the unknown term is the one determining the decay rate of the stock, while they differ when the parameter being learned i...

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Veröffentlicht in:Journal of economic dynamics & control 2008-02, Vol.32 (2), p.470-496
Hauptverfasser: Cunha-e-Sá, Maria A., Santos, Vasco
Format: Artikel
Sprache:eng
Schlagworte:
Accumulation
Economic dynamics
Economics
Environmental policy
Experimental economics
Experimental methods
Learning
Pollution
Pollution costs
Problem solving
Regression analysis
Signal-dependent experimentation
Stocks
Studies
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Beschreibung
Zusammenfassung:We study signal-dependent experimentation in the presence of accumulation and show that the passive-learner's action surprisingly coincides with the experimentor's when the unknown term is the one determining the decay rate of the stock, while they differ when the parameter being learned is the one measuring the accumulation rate. These results highlight the importance of the dynamic structure of the problem in signal-dependent experimentation. Moreover, they have important consequences for the pollution-accumulation debate currently in progress.
ISSN:0165-1889
1879-1743
DOI:10.1016/j.jedc.2007.02.003