Specific behavioral tendencies cause investors to deviate from optimal investing. We investigate three such tendencies in a simplified stock market. Subjects rarely follow the fully profit-maximizing strategy, most commonly by ignoring information and continuing to hold on to a stock regardless...

In an earlier paper (Raymond C. Battalio, John H. Kagel, and Don N. Mac Donald, 1985), we reported Allais-type violations of the independence axiom of expected utility theory with rats choosing over positively valued payoffs (food rewards). This note extends this research, examining animals'...

A two-part tariff exists when a fixed payment is made before any purchases are allowed. When buyers visit a monopolist more than once per period, they have the ability to substitute between visits and consumption per visit. This substitution weakens the surplus-extracting power of a two-part...