Satisficing or Optimizing? - An Experimental Study
AbstractThis experimental study investigates whether individuals prefer bounded rationality over rational choice theory when facing simple investment tasks. First, participants state some personal parameters that serve as an input to render a theoretical approach, namely satisficing or optimality, applicable. Then, they are guided through the decision making process where either ‘satisficing’ or ‘optimality’ is suggested and has to be implemented. The behavioral appeal of the two approaches is measured by the adjustments of personal parameters until accepting the investment decision suggested by theory. Additionally, a questionnaire is administered to elicit subjective contentment with the two approaches.
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Bibliographic InfoPaper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Papers on Strategic Interaction with number 2006-11.
Length: 26 pages
Date of creation: Jul 2006
Date of revision:
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-2006-07-09 (All new papers)
- NEP-CBE-2006-07-09 (Cognitive & Behavioural Economics)
- NEP-EVO-2006-07-09 (Evolutionary Economics)
- NEP-EXP-2006-07-09 (Experimental Economics)
- NEP-FIN-2006-07-09 (Finance)
- NEP-HPE-2006-07-09 (History & Philosophy of Economics)
- NEP-MIC-2006-07-09 (Microeconomics)
- NEP-UPT-2006-07-09 (Utility Models & Prospect Theory)
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.:
- Werner Güth & Gerlinde Fellner & Ev Martin, 2006. "Task Transcending Satisficing - An Experimental Study," Papers on Strategic Interaction 2006-09, Max Planck Institute of Economics, Strategic Interaction Group.
- Gerlinde Fellner & Werner Güth & Boris Maciejovsky, 2005. "Satisficing in Financial Decision Making A Theoretical and Experimental Attempt to Explore Bounded Rationality," Papers on Strategic Interaction 2005-23, Max Planck Institute of Economics, Strategic Interaction Group.
- Werner G, th & Bezalel Peleg, 2001. "When will payoff maximization survive? An indirect evolutionary analysis," Journal of Evolutionary Economics, Springer, vol. 11(5), pages 479-499.
- 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.
- Siegfried Berninghaus & Werner G?th & M. Vittoria Levati & Jianying Qiu, 2009. "Satisficing in sales competition: experimental evidence," Working Papers 2009-14, Faculty of Economics and Statistics, University of Innsbruck.
- Siegfried Berninghaus & Werner Güth & M. Vittoria Levati & Jianying Qiu, 2006. "Satisficing in sales competition: experimental evidence," Papers on Strategic Interaction 2006-32, Max Planck Institute of Economics, Strategic Interaction Group.
- Schwartz, Hugh, 2008. "The role of aspirations and aspirations adaptation in explaining satisficing and bounded rationality," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(3), pages 949-957, June.
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- Malakhov, Sergey, 2012.
"К Вопросу О Возможности Синтеза Концепции Удовлетворяющего Поиска И Неоклассической Доктрины
[A note on the synthes," MPRA Paper 49494, University Library of Munich, Germany.
- Werner Güth, 2006. "Satisficing in Portfolio Selection - Theoretical Aspects and Experimental Tests," Papers on Strategic Interaction 2006-16, Max Planck Institute of Economics, Strategic Interaction Group.
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