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

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.

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Year of publication:	2008-09-09
Authors:	Güth, Werner ; Levatia, M. Vittoria ; Ploner, Matteo
Institutions:	Wirtschaftswissenschaftliche Fakultät, Friedrich-Schiller-Universität Jena
Subject:	Satisficing behavior \| Bounded rationality \| Triopoly

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Extent:	application/pdf
Series:	Jena Economic Research Papers.
Type of publication:	Book / Working Paper
Notes:	Number 2008-067
Classification:	C92 - Laboratory; Group Behavior ; C72 - Noncooperative Games ; D43 - Oligopoly and Other Forms of Market Imperfection
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005090526