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Prior-Free Optimality and Satisficing - A Common Framework and its Experimental Implementation -

Werner Güth ()

No 2008-055, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: Similar to welfare economics where with(out) interpersonal comparisons one defines unique (set-valued) welfare (Pareto) optima, we present a framework for one-person decision making where with(out) a prior probability distribution individual optimality prescribes usually a unique (set of) choice(s). Satisfiable aspirations in the sense that there exists some choice guaranteeing them define a much larger choice set whose intersection with the set of prior-free optimal choices is never empty. We also review experimental procedures and results which incentivize aspiration formation and reject even prior-free optimality experimentally.

Keywords: Satisficing; bounded rationality; optimality (search for similar items in EconPapers)
JEL-codes: B4 D10 D81 (search for similar items in EconPapers)
Date: 2008-07-02
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp and nep-upt
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