In this paper, we apply the bounded rationality approach to an investment situation. In a simple setting where an investor decides between a riskless bond and a risky asset, we distinguish three aspiration levels: a lowest threshold which one wants to guarantee, the aspiration level given by...

We experimentally test overconfidence in investment decisions by offering partic- ipants the possibility to substitute their own for alternative investment choices. Overall, 149 subjects participated in two experiments, one with just one risky as- set, the other with two risky assets....

Overall, 72 subjects invest their endowment in four risky assets. Each combination of assets yields the same expected return and variance of returns. Illusion of expertise prevails when one prefers nevertheless the self-selected portfolio. After being randomly assigned to groups of four subjects...

This paper reports on an experiment designed to explore the robustness of the deadline effect in multi period bargaining games using constant and decreasing pies, different time horizons, and constant and alternating roles. Our results indicate that decreasing pies and alternating roles lead to...

We experimentally test overconfidence in investment decisions by offering participants the possibility to substitute their own for alternative investment choices. Overall, 149 subjects participated in two experiments, one with just one risky asset, the other with two risky assets. Overconfidence...

In this paper we report an experimental study of the ultimatum game in which subjects bargain for constant and slowly decreasing pies, over 3 and 11 rounds with either constant or alternating offers. With decreasing pies efficiency requires early agreements, whereas constant pies allow for late...