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, andform their own profit-aspiration for each element of their conjecture. Weformally define the concepts of satisficing and prior-free optimality andcheck if seller participants behave in accordance with them. We find thatseller participants are satisficers, but fail to be "prior-free" optimal.

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Year of publication:	2008-09-01
Authors:	Güth, Werner ; Levati, M. Vittoria ; Ploner, Matteo
Institutions:	Max-Planck-Institut für Ökonomik <Jena> / Abteilung Strategische Interaktion
Subject:	Entscheidungstheorie \| decision theory \| Eingeschränkte Rationalität \| Preiswettbewerb \| search costs

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Extent:	557056 bytes 33 p. application/pdf
Series:	Max-Planck-Institut für Ökonomik - Papers on Strategic Interaction Jena Economic Research Papers ; 067 (2008)
Type of publication:	Book / Working Paper
Language:	English
ISSN:	1864-7057
Classification:	C72 - Noncooperative Games ; C92 - Laboratory; Group Behavior ; D43 - Oligopoly and Other Forms of Market Imperfection ; Forecast, decision making ; Terms and pricing policy ; Simulation methods ; Individual Working Papers, Preprints ; No country specification
Source:	USB Cologne (business full texts)

Persistent link: https://www.econbiz.de/10005866446