Underestimating Learning by Doing

40 Pages Posted: 12 Oct 2021 Last revised: 9 Dec 2024

See all articles by Samantha Horn

Samantha Horn

University of Chicago

George Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences

Date Written: October 01, 2024

Abstract

Many economic decisions, such as whether to invest in developing new skills, change professions, or purchase a technology, benefit from accurate estimation of skill acquisition. We examine the accuracy of such predictions by having study participants predict the speed at which they will master unfamiliar tasks. Across three studies involving two types of tasks and two levels of difficulty, we find systematic underestimation of learning, even after receiving feedback. In a fourth study, participants predicting others' performance showed significantly less underestimation, suggesting that projection bias–over-reliance on immediate perceptions of effort and difficulty–may drive prediction errors.

Keywords: learning, beliefs, forecasting

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JEL Classification: C91, D83, D91

Suggested Citation

Horn, Samantha and Loewenstein, George F., Underestimating Learning by Doing (October 01, 2024). Available at SSRN: https://ssrn.com/abstract=3941441 or http://dx.doi.org/10.2139/ssrn.3941441

Samantha Horn (Contact Author)

University of Chicago ( email )

Chicago
United States

George F. Loewenstein

Carnegie Mellon University - Department of Social and Decision Sciences ( email )

Pittsburgh, PA 15213-3890
United States
412-268-8787 (Phone)
412-268-6938 (Fax)

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