Satisficing and prior-free optimality in price competition : a theoretical and experimental analysis

Werner Güth; M. Vittoria Levati; Matteo Ploner

On 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. -- Satisficing behavior ; bounded rationality ; triopoly

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Year of publication:	2008
Other Persons:	Güth, Werner (contributor) ; Levati, M. Vittoria (contributor) ; Ploner, Matteo (contributor)
Publisher:	Jena : Univ. [u.a.]
Subject:	Oligopol \| Oligopoly \| Preiswettbewerb \| Price competition \| Begrenzte Rationalität \| Bounded rationality \| Theorie \| Theory