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The commitment effect in belief evolution
Gehring, Thomas; Güth, Werner; René Levínský - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2003
In this note we establish that rational demand expectations willtypically not evolve in an evolutionary model. In an evolutionarymodel beliefs act like a commitment device to more aggressive be-havior. This commitment effect has the same direction for strategicsubstitutes and complements and...
Persistent link: https://www.econbiz.de/10005866911
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Satisficing and prior-free optimality in price competition:a theoretical and experimental analysis
Güth, Werner; Levati, M. Vittoria; Ploner, Matteo - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2008
On a heterogeneous experimental oligopoly market, sellers choose a price,specify a set-valued prior-free conjecture about the others' behavior, andform their own profit-aspiration for each element of their conjecture. Weformally define the concepts of satisficing and prior-free optimality...
Persistent link: https://www.econbiz.de/10005866446
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Asymmetric Information without Common Priors: An IndirectEvolutionary Analysis of Quantity Competition
Güth, Werner; Llorente Ervitib, Loreto; Ziegelmeyer, … - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2006
The common prior assumption justifies private beliefs as posterior probabilities when updatinga common prior based on individual information. Common priors are pervasive in most economicmodels of incomplete information and oligopoly models with asymmetrically informed firms. Wedispose of the...
Persistent link: https://www.econbiz.de/10005866639
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Satisficing in sales competition: experimental evidence
Berninghaus, Siegfried; Güth, Werner; Levati, M. Vittoria - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2006
In a stochastic duopoly market, sellers must form state-specific aspirationsexpressing how much they want to earn given their expectationsabout the other's behavior. We define individually and mutually satisficingsales behavior for given individual beliefs and aspiration profiles. In afirst...
Persistent link: https://www.econbiz.de/10005866647
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Quantity Competition under Asymmetric Information withoutCommon Priors: An Indirect Evolutionary Approach
Güth, Werner; Llorente Erviti, Loreto; Ziegelmeyer, Anthony - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2004
The common prior assumption asserts that the beliefs of agents in different states of theworld are their posteriors based on a common prior and possibly some private signal. Commonpriors are pervasive in most economic models of incomplete information, oligopoly models withasymmetrically informed...
Persistent link: https://www.econbiz.de/10005866870
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Buying Versus Hiring – An Indirect Evolutionary Approach
Berninghaus, Siegfried K.; Güth, Werner - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2002
On an otherwise symmetric oligopoly market with stochastic demands for heterogeneousproducts firms can either hire an employee or partner or buy therequired labor input on the labor market. Whereas the wage of hired labor doesnot depend on the realization of stochastic demand, the price of...
Persistent link: https://www.econbiz.de/10005867008
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Voluntary contributions with risky and uncertain marginalreturns: the importance of the minimal value
Levati, Maria Vittoria; Morone, Andrea - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2009
contributions. This paper presentsexperimental results illustrating that the effects of risk and uncertainty dependon the employed … efficiency gains,the presence of risk and uncertainty about the public good’s value is not detrimentalto cooperation. This … finding casts doubt on the hypothesis that riskand uncertainty, per se, weaken people’s willingness to contribute... …
Persistent link: https://www.econbiz.de/10005866390
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Loss aversion and mental accounting: the favorite longshot bias in parimutuel betting
Qiu, Jianying - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2007
Parimutuel betting markets are simplified financial markets, andcan thus provide a clearer view of pricing issues which are more complicatedelsewhere. Though empirical studies generally conclude thatthe parimutuel betting markets are surprisingly efficient, it is alsofound that for horses with...
Persistent link: https://www.econbiz.de/10005866605
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Competition on Common Value Markets with Naive Traders– A Theoretical and Experimental Analysis
Chlaß, Nadine; Güth, Werner - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2007
Theoretically and experimentally, we generalize the analysis of acquiringa company (Samuelson and Bazerman 1985) by allowing for competition ofboth, buyers and sellers. Naivety of both is related to the idea that higherprices exclude worse qualities. While competition of naive buyers...
Persistent link: https://www.econbiz.de/10005866465
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On the Co-evolution of Insider Informationand Idiosyncratic Beliefs
Gering, Thomas; Güth, Werner; Levinsky, Rene - Max-Planck-Institut für Ökonomik <Jena> / Abteilung … - 2007
In a market with stochastic demand at most one seller can acquire costly informationabout demand. Other sellers entertain idiosyncratic beliefs about the marketdemand and the probability that an informed seller is trading in the market. Theseidiosyncratic beliefs co-evolve with the potential...
Persistent link: https://www.econbiz.de/10005866567