Exploratory decision-making in complex environments

Should I get chocolate ice cream as usual or try the lemon-chocolate mix from the weekly special? Everybody frequently faces the choice between well-known options (i.e. exploiting) and alternatives that potentially best current favourites (i.e. exploring). Previous research showed that, even in changing environments, people are able to effectively balance exploration and exploitation. However, some presumably influential factors for human exploratory behaviour in complex, real world environments have not gained enough attention in the literature. In the present work, we will discuss the potential impact of three such factors on people’s exploratory decision-making. First, we focus on noisy information and the fact that humans often obtain both, relevant and irrelevant information to make exploratory decisions. We present experimental evidence supporting the idea that people are able to ignore misleading information that is irrelevant for effective exploratory decision- making. Aside from noisy information about choice outcomes, people are often able to observe their peers making similar decisions or even face decisions as a group. A further study therefore examines how people use information about others’ decisions to make their own exploratory choices. Though mostly advantageous, social information can also lead to bad decisions in some cases. Lastly, while most lab studies involve decisions with objective outcomes (e.g. money), many real world decisions require people to interpret outcomes subjectively (e.g. the taste of food). Two lab experiments, together with field data involving choices of more than 380,000 supermarket customers over 250 weeks suggest that people explore choices with subjective outcomes in a manner counter to the normative predictions for objective outcomes. The findings support the idea that people’s choices change their preferences, inducing coherency-maximizing behaviour where exploration becomes less likely the longer individuals have been exploiting recently