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Do Choices Affect Preferences? Some Doubts and New Evidence

Holden, Steinar - CESifo - 2009

Recent research is exploring the case for choice-induced changes in preferences using the free-choice paradigm of Brehm … (1956). Participants are faced with a choice between items that they have given the same rating of liking, two items at a … time, and it is found that an item not chosen in one choice has a lower tendency of being chosen in a subsequent choice …

Persistent link: https://www.econbiz.de/10008583740

Beyond Non-Satiation: Needs and Requirements

Pettini, Anna - CESifo - 2014

The hypothesis of non-satiation of rational choice theory is very seldom posed under scrutiny, maybe because it is …

Persistent link: https://www.econbiz.de/10011097939

Afriat’s Theorem for General Budget Sets

Forges, Francoise; Minelli, Enrico - CESifo - 2006

Afriat (1967) showed the equivalence of the strong axiom of revealed preference and the existence of a solution to a set of linear inequalities. From this solution he constructed a utility function rationalizing the choices of a competitive consumer. We extend Afriat’s theorem to a class of...

Persistent link: https://www.econbiz.de/10005196223

Afriat's Theorem for Indivisible Goods

Forges, Francoise; Iehlé, Vincent - CESifo - 2013

We identify a natural counterpart of the standard GARP for demand data in which goods are all indivisible. We show that the new axiom (DARP, for “discrete axiom of revealed preference”) is necessary and sufficient for the rationalization of the data by a well-behaved utility function. Our...

Persistent link: https://www.econbiz.de/10010877876

Reserve Price Formation in Online Auctions

Englmaier, Florian; Schmöller, Arno - CESifo - 2008

We use a unique hand collected data set of 6 258 auctions from the online football manager game Hattrick to study micro-patterns of reserve price formation. We find that chosen reserve prices exhibit both, very sophisticated and “irrational” behavior by the sellers. Reserve prices pick up...

Persistent link: https://www.econbiz.de/10005766032

Framing Effects in Political Decision Making: Evidence from a Natural Voting Experiment

Buetler, Monika; Maréchal, Michel André - CESifo - 2007

This paper analyzes a recent ballot in which two virtually identical popular initiatives, both demanding a decrease in the legal age of retirement in Switzerland, led to differences in approval rates of nearly seven percentage points. Based on this unique natural experiment, the existence of...

Persistent link: https://www.econbiz.de/10005094330

Fundamental and Non-Fundamental Equilibria in the Foreign Exchange Market. A Behavioural Finance Framework

Grauwe, Paul de; Dieci, Roberto; Grimaldi, Marianna - CESifo - 2005

We develop a simple model of the exchange rate in which agents optimize their portfolio and use different forecasting rules. They check the profitability of these rules ex post and select the more profitable one. This model produces two kinds of equilibria, a fundamental and a bubble one. In a...

Persistent link: https://www.econbiz.de/10005406025

Bubbles and Crashes in a Behavioural Finance Model

Grauwe, Paul De; Grimaldi, Marianna - CESifo - 2004

Persistent link: https://www.econbiz.de/10005406325

The Weak Rationality Principle in Economics

Kirchgässner, Gebhard - CESifo - 2005

The weak rationality principle is not an empirical statement but a heuristic rule of how to proceed in social sciences. It is a necessary ingredient of any ‘understanding’ social science in the Weberian sense. In this paper, first this principle and its role in economic theorizing is...

Persistent link: https://www.econbiz.de/10005406455

Behavioral Economics as Applied to Firms: A Primer

Armstrong, Mark; Huck, Steffen - CESifo - 2010

firm behaviour in markets. Topics discussed include the impact of imitative and satisficing behavior by firms, outcomes …

Persistent link: https://www.econbiz.de/10008572583