Self-Confirming Biased Beliefs in Organizational “Learning by Doing”

Figure 7

(a) Degree of biased beliefs (i.e., the distance between belief and reality); (b) probability of choosing the optimal alternative (note that when the high degree of exploration is exogenously given (e.g., ), the agent may choose suboptimal alternatives not because of SCBB but because of exploration (i.e., noise in the choice process)).

(a)

(b)