@techreport{NBERw13822,
 title = "Learning in the Credit Card Market",
 author = "Sumit Agarwal and John C. Driscoll and Xavier Gabaix and David Laibson",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "13822",
 year = "2008",
 month = "February",
 URL = "http://www.nber.org/papers/w13822",
 abstract = {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.},
}