Showing 1 - 10 of 38
We study product differentiation on a Salop circle when firms relocate incrementally due to bounded rationality. We prove that, under common assumptions on demand, firms relocate only when two or more firms target the same niche. In any other case, there is no incentive for any firm to relocate...
Persistent link: https://www.econbiz.de/10011259983
Firms simultaneously set prices in a homogeneous-product market where uninformed consumers search for price information. Some uninformed consumers are local searchers who visit only one seller, possibly due to high search costs or bounded rationality; whereas others search sequentially with an...
Persistent link: https://www.econbiz.de/10005087521
The paper discusses how and why the theories of neo-classical economics are inadequate to provide a framework to human resource management and therefore must give way to dynamic gradual optimization procedure based on the principles of bounded rationality and satisficing behaviour in dealing...
Persistent link: https://www.econbiz.de/10005260316
Contingent charges for financial services, such as fees for unauthorized overdrafts, are often controversial. We study the economics of contingent charges in a stylized setting with naive and sophisticated consumers. We contrast situations where the naive benefit from the presence of...
Persistent link: https://www.econbiz.de/10009654228
We analyse life-cycle saving decisions when households use simple heuristics, or rules of thumb, rather than solve the underlying intertemporal optimization problem. We simulate life-cycle saving decisions using three simple rules and compute utility losses relative to the solution of the...
Persistent link: https://www.econbiz.de/10009319645
Abstract. In the 1980s and at beginning of the 1990s the debate on expectation formation mechanism was dominated by the rational expectation hypothesis. Later on, more interest was directed towards alternative approaches to expectations analysis, mainly based on the bounded rationality paradigm...
Persistent link: https://www.econbiz.de/10009328121
Overconfidence is a well-established behavioral phenomenon that involves an overestimation of own capabilities. We introduce a model, in which managers and agents exert effort in a joint production, after the manager decides on the allocation of the tasks. A rational manager tends to delegate...
Persistent link: https://www.econbiz.de/10009386697
Dynamic models of learning and adaptation have provided realistic predictions in terms of voting behavior. This study aims at contributing to their empirical verification by investigating voting behavior in terms of participation as well as choice. We test through panel data methods an...
Persistent link: https://www.econbiz.de/10009647342
Kacelnik, Schuck-Paim and Pompilio (this volume, p. 377) show that rationality axioms from economics are neither necessary nor sufficient to guarantee that animal behavior is biologically adaptive. To illustrate that biological adaptiveness does not imply conformity with the consistency axioms...
Persistent link: https://www.econbiz.de/10008693567
We analyze a symmetric n-firm Cournot oligopoly with a heterogeneous population of optimizers and imitators. Imitators mimic the output decision of the most successful firms of the previous round a l`a Vega-Redondo (1997). Optimizers play a myopic best response to the opponents’ previous...
Persistent link: https://www.econbiz.de/10005785827