DAVID

WALKER-JONES

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Welcome! I am a lecturer with the School of Economics at the University of Surrey and I specialize in micro theory and experimental economics.

 

Research

To accurately predict changes in behavior and estimate preferences it is crucial to understand how the cost of information determines optimal choice mistakes. I characterize the choice patterns that are consistent with two major models of costly learning when price changes and extend the analysis to aggregate data that incorporates heterogeneous decision makers. I take these theoretical considerations to a lab setting and find that the heterogeneity of subjects is key for understanding behavior, and that subjects are sophisticated when choosing both when and what to learn. Subjects are most likely to learn in the setting predicted by the theory, and there is evidence that they accumulate information gradually in order to alter the relative probabilities of different kinds of choice mistakes.

This paper uses an axiomatic foundation to create a new measure for the cost of learning that allows the different attributes of the options faced by an agent to differ in their associated learning costs. The new measure maintains the tractability of Shannon's classic measure but produces richer choice predictions and identifies a new form of informational bias significant for welfare and counterfactual analysis that is conducted with the multinomial logit model. Necessary and sufficient conditions are provided for optimal behavior under the new measure for the cost of learning.