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Do People Rely on the Self-Interested Maximization of Others? An Experimental Test

Author

Listed:
  • T. Randolph Beard

    (College of Business, Auburn University, Auburn, Alabama 36849)

  • Richard O. Beil

    (College of Business, Auburn University, Auburn, Alabama 36849)

Abstract

The assumption that agents engage in maximizing behavior, while ubiquitous in economic theory, differs from the assumption that agents are willing to rely on the maximizing behavior of others. This paper offers an empirical examination of this distinction using experimental methods. Utilizing a series of experimental treatments based on a simple, two player extensive form game of perfect information, we find strong evidence that apparently rational people are often unwilling to rely on the self-interested behavior of others, despite the observed near universality of maximizing play.

Suggested Citation

  • T. Randolph Beard & Richard O. Beil, 1994. "Do People Rely on the Self-Interested Maximization of Others? An Experimental Test," Management Science, INFORMS, vol. 40(2), pages 252-262, February.
  • Handle: RePEc:inm:ormnsc:v:40:y:1994:i:2:p:252-262
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    File URL: http://dx.doi.org/10.1287/mnsc.40.2.252
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