Satisficing and maximizing consumers in a monopolistic screening model
We study a simple model in which a monopolist supplies a multi-attribute good and does not know whether the consumer is an expected-utility maximizer or a boundedly rational type that follows the satisficing heuristic proposed by Herbert Simon. We find that, unless the probability of the consumer being fully rational is sufficiently high, the fact that a boundedly rational consumer never exchanges satisfactory with unsatisfactory alternatives implies that he/she never ends up with an alternative strictly better than his/her aspiration levels.
Volume (Year): 66 (2013)
Issue (Month): 3 ()
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