Satisficing in Portfolio Selection - Theoretical Aspects and Experimental Tests
AbstractThe satisficing approach with its three constituent processes, aspiration formation, satisficing, and aspiration adjustment, is formally elaborated for a specific class of portfolio selection tasks. It is partly poorly confirmed by experimental data, indicating that bounded rationality requires teaching or, respectively, consulting, and learning. It is also discussed and tested experimentally whether satisficing is task transcending (are there individual constants in satisficing behavior for related tasks?) and absorbable (do we stick to satisficing behavior when becoming aware of it?).
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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 2006-16.
Length: 31 pages
Date of creation: Sep 2006
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-09-23 (All new papers)
- NEP-CBE-2006-09-23 (Cognitive & Behavioural Economics)
- NEP-EVO-2006-09-23 (Evolutionary Economics)
- NEP-EXP-2006-09-23 (Experimental Economics)
- NEP-FIN-2006-09-23 (Finance)
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