Trapped in the past? Routinized rule compliance and the speed of adaptation after rule change

Abstract

From a rational choice perspective, individuals are expected to follow rules when doing so maximizes their utility, implying deliberate, case-by-case decision-making. In many contexts, however, explicit deliberation about rule following is unlikely. Instead, individuals acquire rule-based behavioral patterns through experience and the observation of others and apply these rules whenever situations appear sufficiently similar to prior learning contexts. Such routinized rule following can enhance coordination, but it may also have a downside: reduced responsiveness when rules change. In a preregistered, incentivized laboratory experiment ( N  = 288), we examine how quickly individuals adapt to rule change. Using a newly developed and pretested paradigm, we manipulate between-subjects the learning environment (performance feedback only versus additional peer-observation or information search) and the beneficiary of rule compliance (individuals themselves versus others). Our findings indicate that learning environment and beneficiary each affect the speed of adaptation, but do not interact: Compared to mere performance feedback as a baseline, the adaptation to a new rule is faster when individuals can observe others’ behavior in the same situation, but not when they can actively search for information about the rule. Adaptation also happens more quickly when rule compliance benefits individuals themselves rather than serving others. Overall, the findings shed light on how learning channels and incentive structures jointly shape the speed of adaptation, with implications for the effective implementation of rule changes.