This experimental study investigates whether individuals preferbounded rationality over rational choice theory when facing simpleinvestment tasks. First, participants state some personal parametersthat serve as an input to render a theoretical approach, namelysatisficing or optimality,...

We experimentally investigate whether the satisficing approach isabsorbable, i.e., whether it still applies after participants become awareof it. In a setting where an investor decides between a riskless bondand either one or two risky assets, we familiarize participants with thesatisficing...

A procurement contract is granted by a bureaucrat (the auctioneer)who is interested in a low price and a bribe from the provider.The optimal bids and bribes are derived based on an iid private costassumption. In the experiment, bribes are negatively framed (betweensubjectstreatment) to capture...

The paper explores the applicability of the satisficing approach. Inparticular, we investigate whether basic principles of aspiration formationand satisficing behavior are transferable between similar situations.Individuals are sequentially confronted with two risky investmenttasks, a simple and...

If the (un)trustworthy are rare, people will talk about them, making their detectionmore reliable and / or less costly. When, however, both types appear in large numbers,detecting (un)trustworthiness will be considerably more difficult and possibly too costly.Based on Güth and Kliemt (2000) we...

In a large scale newspaper experiment 5,132 readers of the German weekly, Die Zeit, participated in a three-person bargaining game. In our data analysis we focus on (1) the influence of age, gender, profession and the medium chosen for participation on bargaining behavior and on (2) the external...

Applying an evolutionary framework, we investigate how a reputation mechanism and abuyer insurance (as used on Internet market platforms such as eBay) interact to promote trustworthinessand trust. Our analysis suggests that the costs involved in giving reliable feedbackdetermine the gains from...

Medical doctors act as agents of their patients by either treating them directly orreferring them to other more or differently specialized doctors, who therebybecome “agents of agents”. The main aim of this paper is to model centralaspects of such two-layered agency relations in the medical...

Economic intuitions concerning rational behaviour in interactive social situations are shaped byidealized models which are regarded as “approximately true”. But ideal models cannot be meaningfullydeemed approximately true unless asymptotically convergent processes imply them as limit cases....

In this paper we consider conventions as regularities in behavior which help to solve coordinationproblems in a society. These problems can be formalized as non-cooperative games with severalequilibria. We know that in such situations serious problems of equilibrium selection arise whichcannot...