Plans of Action

Abstract. We study the extent to which contemporaneous correlations across actions affect an agent’s preferences over the different strategies in exploration problems. We show that such correlations carry no economic content and do not affect the agent’s preferences and, in particular, her optimal strategy. We argue that for similar reasons there is an inherent partial identification of the beliefs in exploration problems. Nevertheless, even under the partial identification, we show there are meaningful behavioral restrictions allowing the modeler to test whether the agent is acting according to some Bayesian model.