Boom, Bust, and Failures to Learn in Experimental Markets

摘要: Boom and bust is a pervasive dynamic for new products. Word of mouth, marketing, learning curve effects can fuel rapid growth, often leading to overcapacity, price war, bankruptcy. Previous experiments suggest such dysfunctional behavior be caused by systematic "misperceptions feedback," where decision makers do not adequately account critical feedbacks, time delays, nonlinearities which condition system dynamics. However, prior studies failed vary the strength these feedbacks as treatments, omitted market processes, allow learning. A making task portraying product dynamics used test theory varying key feedback processes in simulated market. Subjects performed repeatedly, encouraging Nevertheless, performance relative potential poor severely degraded when complexity environment high, supporting misperception hypothesis. The negative on were moderated experience, even though average improved. Models subjects' heuristics are estimated; changes over trials estimated cue weights explain why subjects improve but fail gain insight into system. Though conditions excellent, experience does appear mitigate misperceptions or dysfunction they cause tasks. We discuss implications educational use simulations games.