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
Authors:	Güth, Werner ; Levati, Maria Vittoria ; Ploner, Matteo
Publisher:	Jena : Friedrich Schiller University Jena and Max Planck Institute of Economics
Subject:	Oligopol \| Preiswettbewerb \| Beschränkte Rationalität \| Theorie \| Satisficing behavior \| bounded rationality \| triopoly

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Series:	Jena Economic Research Papers ; 2008,067
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	58385740X [GVK] hdl:10419/31732 [Handle]
Classification:	C92 - Laboratory; Group Behavior ; C72 - Noncooperative Games ; D43 - Oligopoly and Other Forms of Market Imperfection
Source:	EconStor

Persistent link: https://www.econbiz.de/10010275038