Satisficing and maximizing consumers in a monopolistic screening model

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We study a simple model in which a monopolist supplies a multi-attribute good and
does not know whether the consumer is an expected-utility maximizer or a boundedly rational type that follows the satisficing heuristic proposed by Herbert Simon. We find that unless the probability of the consumer being fully rational is sufficiently high, the fact that the boundedly rational consumer never exchanges satisfactory with unsatisfactory alternatives implies that she never ends up with an alternative strictly better than her aspiration levels.
Original languageEnglish
Pages (from-to)385-389
Number of pages5
JournalMathematical Social Sciences
Issue number3
Early online date31 Aug 2013
Publication statusPublished - Nov 2013

Bibliographical note

This paper is based on a chapter of my Ph.D. dissertation. I would like to thank Jose Apesteguia, Daniel Danau, Seong-Hoon Kim, Paola Manzini, Ricardo Alberto Marques Pereira, and my supervisors, Marco Mariotti and Luigi Mittone, for their helpful comments. I am also grateful to the editor, the associated editor, and two referees. Any error is my own responsibility.


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