A Non-Bayesian Approach to (Un)Bounded Rationality
AbstractCan one define and test the hypothesis of (un)bounded rationality in stochastic choice tasks without endorsing Bayesianism? Similar to the state specificity of assets, we rely on state-specific goal formation. In a given choice task, the list of state-specific goal levels is optimal if one cannot increase the goal level for one state without having to decrease that for other states. We show that this allows to relate optimality more easily to bounded rationality where we interpret goal levels as aspirations. If for the latter there exist choices satisfying all state-specific aspirations and if one such choice is used, we speak of satisficing which may or may not be optimal.
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Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2007-035.
Date of creation: 06 Jul 2007
Date of revision:
Satisficing; bounded rationality; optimality;
Find related papers by JEL classification:
- B4 - Schools of Economic Thought and Methodology - - Economic Methodology
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D10 - Microeconomics - - Household Behavior - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-07-13 (All new papers)
- NEP-CBA-2007-07-13 (Central Banking)
- NEP-CBE-2007-07-13 (Cognitive & Behavioural Economics)
- NEP-EVO-2007-07-13 (Evolutionary Economics)
- NEP-EXP-2007-07-13 (Experimental Economics)
- NEP-UPT-2007-07-13 (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.:
- 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.
- 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.
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