Foregone with the Wind

In an attempt to improve our understanding of the effects of foregone payoffs on learning, the current paper examines the adaptation in decision tasks with a large number of choice alternatives. Our experimental setup varies the feedback about foregone payoffs. Study 1 shows that foregone payoffs can induce strong round–to–round sequential dependencies in the data. Study 2 demonstrates that information about foregone payoffs can impair maximization in a noisy environment, but experience eliminates this negative effect. Study 3 and 4 illustrate a positive effect of foregone payoffs. We investigate whether the common models of adaptive learning (reinforcement learning, fictitious play, EWA, payoff assessment and learning among cognitive strategies) can track this complex pattern.