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Satisficing in sales competition: experimental evidence

  • Berninghaus, Siegfried K.

    ()

    (Universität Karlsruhe)

  • Gueth, Werner

    ()

    (Max Planck Institute for Research into Economic Systems, Strategic Interaction Group)

  • Levati, M. Vittoria

    ()

    (Max Planck Institute of Economics, Strategic Interaction Group)

  • Qiu, Jianying

    (Max Planck Institute of Economics, Strategic Interaction Group)

In a duopoly market, aspirations express how much sellers want to earn given their expectations about the other's behavior. We define individually and mutually satisficing sales behavior for given individual beliefs and aspirations. In a first experimental phase, whenever satisficing is not possible, beliefs, aspirations, or sales have to be adapted. In a second phase, testing the absorption of satisficing, participants are free to select nonsatisficing sales profiles. The results reveal that most people are satisficers who, either mandatorily or deliberately, tend to adjust aspiration levels if they cannot be satisfied.

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Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number 07-03.

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Length: 29 pages
Date of creation: 16 May 2007
Date of revision:
Handle: RePEc:xrs:sfbmaa:07-03
Note: Financial support from the Deutsche Forschungsgemeinschaft, SFB 504, at the University of Mannheim, is gratefully acknowledged.
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  1. Lilly, Gregory, 1994. "Bounded rationality : A Simon-like explication," Journal of Economic Dynamics and Control, Elsevier, vol. 18(1), pages 205-230, January.
  2. Huck, Steffen & Muller, Wieland & Normann, Hans-Theo, 2001. "Stackelberg Beats Cournot: On Collusion and Efficiency in Experimental Markets," Economic Journal, Royal Economic Society, vol. 111(474), pages 749-65, October.
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  7. Kim, Youngse, 2002. "Satisficing and fairness in ultimatum bargaining game experiments," Risk, Decision and Policy, Cambridge University Press, vol. 7(03), pages 235-247, December.
  8. Werner Güth & Hartmut Kliemt, 2004. "Bounded Rationality and Theory Absorption," Homo Oeconomicus, Institute of SocioEconomics, vol. 21, pages 521-541.
  9. Gerlinde Fellner & Werner Güth & Boris Maciejovsky, 2005. "Satisficing in Financial Decision Making A Theoretical and Experimental Attempt to Explore Bounded Rationality," Papers on Strategic Interaction 2005-23, Max Planck Institute of Economics, Strategic Interaction Group.
  10. Werner Güth & M. Vittoria Levati & Matteo Ploner, 2006. "Is Satisficing Absorbable? - An Experimental Study," Papers on Strategic Interaction 2006-10, Max Planck Institute of Economics, Strategic Interaction Group.
  11. Holt, Charles A, 1985. "An Experimental Test of the Consistent-Conjectures Hypothesis," American Economic Review, American Economic Association, vol. 75(3), pages 314-25, June.
  12. Youngse Kim, 1999. "Satisficing and optimality in 2þ2 common interest games," Economic Theory, Springer, vol. 13(2), pages 365-375.
  13. Napel, Stefan, 2003. "Aspiration adaptation in the ultimatum minigame," Games and Economic Behavior, Elsevier, vol. 43(1), pages 86-106, April.
  14. Werner Güth & Gerlinde Fellner & Ev Martin, 2006. "Satisficing or Optimizing? - An Experimental Study," Papers on Strategic Interaction 2006-11, Max Planck Institute of Economics, Strategic Interaction Group.
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