Centre for Experimental Economics
Walking through the Fog
Wenting Zhou
Abstract
We use an analogy “walking in the fog” to explain the problem under study. Fog has the property that vision becomes less and less clear the further ahead that you try to look, and after a certain distance you simply cannot see anything (except the fog). Suppose you want to get to a certain point, the location of which you know, and you have a compass, a map, and a pedometer (so that you know at all times where, and how far away, is the destination). The only problem is that the map does not show heights, and you know that walking up and down hill consumes energy (the former more than the latter) and that you want to get to your destination with the least consumption of energy. Because of the fog you cannot, without unreasonable assumptions, plan a route to the destination with least energy expenditure; you must therefore rely on some forward looking way of proceeding to your destination. Rather obviously, we have no optimising theory to explain what people should do and hence we are running this experiment to see what they do do, and hence discover some satisficing heuristics. We report on the results from a pilot experiment. This problem, although set in a non-economic context, obviously has relevance to many economic problems, not least the life-cycle savings/consumption problem.
The paper
Instructions
Experimental software
Experimental Software (zip 
, 2,490kb)
Experimental data
Experimental data (zip , 11kb)