Emre Soyer

The Two Settings of Kind and Wicked Learning Environments

Inference involves two settings: In the first, information is acquired (learning); in the second, it is applied (predictions or choices). Kind learning environments involve close matches between the informational elements in the two settings and are a necessary condition for accurate inferences. Wicked learning environments involve mismatches. This conceptual framework facilitates identifying sources of inferential errors and can be used, among other things, to suggest how to target corrective procedures. For example, structuring learning environments to be kind improves probabilistic judgments. Potentially, it could also enable economic agents to exhibit maximizing behavior.

Learning from experience in nonlinear environments: Evidence from a competition scenario

We test peoples ability to learn to estimate a criterion (probability of success in a competition scenario) that requires aggregating information in a nonlinear manner. The learning environments faced by experimental participants are kind in that they are characterized by immediate, accurate feedback involving either naturalistic outcomes (information on winning and/or ranking) or the normatively correct probabilities. We find no evidence of learning from the former and modest learning from the latter, except that a group of participants endowed with a memory aid performed substantially better. However, when the task is restructured such that information should be aggregated in a linear fashion, participants learn to make more accurate assessments. Our experiments highlight the important role played by prior beliefs in learning tasks, the default status of linear aggregation in many inferential judgments, and the difficulty of learning in nonlinear environments even in the presence of veridical feedback.

Kind and Wicked Experience in Marketing Management

Our society venerates experience. It feels right to trust our own experience and that of others. But experience also has adverse effects. Much learning is tacit in nature and, because people are typically unaware and uncritical of the conditions in which this takes place, experience can lead to false beliefs and subsequent actions can reinforce biases. We adopt a two-settings framework in which experience is conceptualized as being acquired in one setting (learning) and then applied in another (target). When information in the two-settings match, the learning environment is kind . Wicked environments are characterized by mismatches and we specify several different types. We note that many inferential errors occur because people implicitly assume informational matches between the two settings. In addition to its explanatory value, the two-settings framework has normative implications. We illustrate these by considering some of the decision-making challenges faced by marketing managers.