Is Satisficing Absorbable? - An Experimental Study

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Is Satisficing Absorbable? - An Experimental Study

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Werner Güth ()
M. Vittoria Levati ()
Matteo Ploner

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Abstract

We experimentally investigate whether the satisficing approach is absorbable, i.e., whether it still applies after participants become aware of it. In a setting where an investor decides between a riskless bond and either one or two risky assets, we familiarize participants with the satisficing calculus applied to specific portfolio selection tasks. After experiencing this calculus repeatedly, participants are free to use it or to select their portfolio freely. The results support, to some extent, the absorbability of the satisficing approach.

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Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Discussion Papers on Strategic Interaction with number 2006-10.

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Length: 28 pages
Date of creation: Jul 2006
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Handle: RePEc:esi:discus:2006-10

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Find related papers by JEL classification:
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

This paper has been announced in the following NEP Reports:

NEP-ALL-2006-07-21 (All new papers)
NEP-CBE-2006-07-21 (Cognitive & Behavioural Economics)
NEP-EVO-2006-07-21 (Evolutionary Economics)
NEP-EXP-2006-07-21 (Experimental Economics)
NEP-FIN-2006-07-21 (Finance)
NEP-FMK-2006-07-21 (Financial Markets)

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Tietz, Reinhard, 1992. "Semi-normative theories based on bounded rationality," Journal of Economic Psychology, Elsevier, vol. 13(2), pages 297-314, June. [Downloadable!] (restricted)
Werner Güth & Hartmut Kliemt, 2004. "Bounded Rationality and Theory Absorption," Discussion Papers on Strategic Interaction 2004-27, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
Other versions:
- Werner Güth & Hartmut Kliemt, 2004. "Bounded Rationality and Theory Absorption," Homo Oeconomicus, Institute of SocioEconomics, vol. 21, pages 521-541.
Egidi, Massimo & Narduzzo, Alessandro, 1997. "The emergence of path-dependent behaviors in cooperative contexts," International Journal of Industrial Organization, Elsevier, vol. 15(6), pages 677-709, October. [Downloadable!] (restricted)
Other versions:
- Alessandro Narduzzo & Massimo Egidi, 1996. "The emergence of path-dependent behaviors in cooperative contexts," CEEL Working Papers 9604, Computable and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia. [Downloadable!]
Gerlinde Fellner & Werner Güth & Boris Maciejovsky, 2005. "Satisficing in Financial Decision Making A Theoretical and Experimental Attempt to Explore Bounded Rationality," Discussion Papers on Strategic Interaction 2005-23, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
Selten, Reinhard, 1998. "Features of experimentally observed bounded rationality," European Economic Review, Elsevier, vol. 42(3-5), pages 413-436, May. [Downloadable!] (restricted)
Other versions:
- Selten, Reinhard, . "Features of Experimentally Observed Bounded Rationality," Discussion Paper Serie B 421, University of Bonn, Germany, revised Nov 1997.

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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Siegfried Berninghaus & Werner Güth & M. Vittoria Levati & Jianying Qiu, 2006. "Satisficing in sales competition: experimental evidence," Discussion Papers on Strategic Interaction 2006-32, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
Other versions:
- Berninghaus, Siegfried K. & Gueth, Werner & Levati, M. Vittoria & Qiu, Jianying, 2007. "Satisficing in sales competition: experimental evidence," Sonderforschungsbereich 504 Publications 07-03, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim. [Downloadable!]
Werner Güth, 2006. "Satisficing in Portfolio Selection - Theoretical Aspects and Experimental Tests," Discussion Papers on Strategic Interaction 2006-16, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]

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