How do learning ability, advice from experts and peers shape decision making?

Abstract This article explores how learning by doing and responsiveness to advice from experts and peers shape individual decisions. Empirical evidence comes from a laboratory experiment that identifies individual learning capacity and then probes how subjects utilize two clearly distinct sources of outside information. The findings reveal heterogeneous learning pace of subjects. In addition, while subjects’ advice utilization leads to improved decision making, it does not foster learning. We also find different responses to our two distinct types of advice: subjects take relatively more advice from peers than they do from the expert. The article finishes with a discussion of how learning and advice taking from distinct sources can be fostered in the real world.