Satisficing or Optimizing? - An Experimental Study

Werner Güth (), Gerlinde Fellner () and Ev Martin ()

Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group

Abstract: This experimental study investigates whether individuals prefer bounded rationality over rational choice theory when facing simple investment tasks. First, participants state some personal parameters that serve as an input to render a theoretical approach, namely satisficing or optimality, applicable. Then, they are guided through the decision making process where either ‘satisficing’ or ‘optimality’ is suggested and has to be implemented. The behavioral appeal of the two approaches is measured by the adjustments of personal parameters until accepting the investment decision suggested by theory. Additionally, a questionnaire is administered to elicit subjective contentment with the two approaches.

Keywords: Theory absorption; Satisficing behavior; Portfolio selection (search for similar items in EconPapers)
JEL-codes: C91 D81 G11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp, nep-fin, nep-hpe, nep-mic and nep-upt
Date: Written
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Persistent link: http://EconPapers.repec.org/RePEc:esi:discus:2006-11

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