Has the World Changed? My Neighbor Might Know: Effects of Social Context on Routine Deviation

Routines help individuals save decision effort and protect them from overreacting to volatile environments. Yet routines become dysfunctional if the environment changes fundamentally. Whether the environment has truly changed is often not easy to tell. We experimentally study adaptation to a change in a previously stable environment. Participants have to choose between one of the four decks of cards. Each deck represents a lottery, with a distribution of gains and losses initially unknown to participants. In the learning phase of the experiment, participants acquire the routine to choose the most attractive deck. Unbeknownst to participants, after an interruption, the lotteries represented by the competing decks are changed. We study how participants react to this change. We manipulate whether participants have access to choices by a confederate who most of the time makes the normative choice. In baseline condition, they never do. In the treatments, access is provided either during the learning phase, during the test phase, or during both phases. Participants are most likely to realize that the world has changed if they had access to the confederate's choices in both phases. Copyright (c) 2014 John Wiley & Sons, Ltd.