To act fast or to bide time? Adaptive exploration under competitive pressure

Competitive pressure affects a wide spectrum of decisions under uncertainty. It forces the individual to balance the value of gathering more information about the quality of potential choice alternatives against the risk that competitors will act first and claim the best options. Although this tradeoff between competition and exploration has long been recognized, little is known about how people adapt their exploration of uncertain options when facing competitive pressure. We examined how competitive pressure affects exploration in the “rivals-in-the-dark” game. Two players simultaneously learn about a set of choice options and compete to claim the best one. Across three studies, we show that people adapt their exploration in response to the structure of the choice environment (including the option set size and the relative number of gains and losses) and in response to repeated competition with the same opponent. Furthermore, we present a model-based analysis showing that their behavior is best described by a compensatory strategy under which the value of further exploration is weighed against the cost of being beaten to the punch by an opponent. The results point to a process of local adaptation whereby people learn to “act fast” based on their experience in a novel competitive environment.