Title: Learning in the credit card market
Description: "Agents with more experience make better choices.  We measure learning dynamics using a panel with four million monthly credit card statements.  We study add-on fees, specifically cash advance, late payment, and overlimit fees.  New credit card accounts generate fee payments of $15 per month.  Through negative feedback -- i.e.  paying a fee -- consumers learn to avoid triggering future fees.  Paying a fee last month reduces the likelihood of paying a fee in the current month by about 40%.  Controlling for account fixed effects, monthly fee payments fall by 75% during the first three years of account life.  We find that learning is not monotonic.  Knowledge effectively depreciates about 10% per month, implying that learning displays a strong recency effect"--National Bureau of Economic Research web site.