Satisficing and prior-free optimality in price competition: a theoretical and experimental analysis
AbstractOn a heterogeneous experimental oligopoly market, sellers choose a price, specify a set-valued prior-free conjecture about the others' behavior, and form their own profit-aspiration for each element of their conjecture. We formally define the concepts of satisficing and prior-free optimality and check if seller participants behave in accordance with them. We find that seller participants are satisficers, but fail to be "prior-free" optimal.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics in its series Jena Economic Research Papers with number 2008-067.
Date of creation: 09 Sep 2008
Date of revision:
Satisficing behavior; Bounded rationality; Triopoly;
Find related papers by JEL classification:
- C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-20 (All new papers)
- NEP-CBE-2008-09-20 (Cognitive & Behavioural Economics)
- NEP-COM-2008-09-20 (Industrial Competition)
- NEP-EXP-2008-09-20 (Experimental Economics)
- NEP-MIC-2008-09-20 (Microeconomics)
- NEP-MKT-2008-09-20 (Marketing)
- NEP-UPT-2008-09-20 (Utility Models & Prospect Theory)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Güth, Werner & Vittoria Levati, M. & Ploner, Matteo, 2010.
"Satisficing in strategic environments: A theoretical approach and experimental evidence,"
The Journal of Socio-Economics,
Elsevier, vol. 39(5), pages 554-561, October.
- Werner Güth & M. Vittoria Levati & Matteo Ploner, 2008. "Satisficing in strategic environments: a theoretical approach and experimental evidence," Jena Economic Research Papers 2008-078, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
- Siegfried Berninghaus & Werner Güth & M. Levati & Jianying Qiu, 2011. "Satisficing search versus aspiration adaptation in sales competition: experimental evidence," International Journal of Game Theory, Springer, vol. 40(1), pages 179-198, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Markus Pasche).
If references are entirely missing, you can add them using this form.