This paper is about satisficing behaviour. Rather tautologically, this is when decision-makers are satisfied with achieving some objective, rather than in obtaining the best outcome. The term was coined by Simon, and has stimulated many discussions and theories. Prominent amongst these theories are models of incomplete preferences, models of behaviour under ambiguity, theories of rational inattention, and search theories. Most of these, however, seem to lack an answer to at least one of two key questions: when should the decision-maker satisfice; (...) and how should the DM satisfice. In a sense, search models answer the latter question, but not the former; moreover, usually the question as to whether any search at all is justified is left to a footnote. A recent paper by Manski fills the gaps in the literature and answers the questions: when and how to satisfice? He achieves this by setting the decision problem in an ambiguous situation and by using the Minimax Regret criterion as the preference functional. The results are simple and intuitive. This paper reports on an experimental test of his theory. The results show that some of his propositions appear to be empirically valid while others are less so. (shrink)

This paper reports on an experimental test of the Principle of Optimality in dynamic decision problems. This Principle, which states that the decision-maker should always choose the optimal decision at each stage of the decision problem, conditional on behaving optimally thereafter, underlies many theories of optimal dynamic decision making, but is normally difficult to test empirically without knowledge of the decision-maker's preference function. In the experiment reported here we use a new experimental procedure to get round this difficulty, which also (...) enables us to shed some light on the decision process that the decision-maker is using if he or she is not using the Principle of Optimality - which appears to be the case in our experiments. (shrink)

This paper reports on an experimental test of the Principle of Optimality in dynamic decision problems. This Principle, which states that the decision-maker should always choose the optimal decision at each stage of the decision problem, conditional on behaving optimally thereafter, underlies many theories of optimal dynamic decision making, but is normally difficult to test empirically without knowledge of the decision-maker's preference function. In the experiment reported here we use a new experimental procedure to get round this difficulty, which also (...) enables us to shed some light on the decision process that the decision-maker is using if he or she is not using the Principle of Optimality - which appears to be the case in our experiments. (shrink)

This paper identifies, and tests experimentally, a prediction of the Nash bargaining axioms that may appear counterintuitive. The context is a simple bargaining problem in which two players have to agree a choice from three alternatives. One alternative favours one player and a second favours the other. The third is an apparently reasonable compromise, but is in fact precluded as an agreed choice by the Nash axioms. Experimental results show that agreement on this third alternative occurs rather often. Our subjects’ (...) behaviour could be interpreted as the paying of an irrationally high price, according to the Nash axioms, in order to reach a compromise agreement. (shrink)

Search and switching costs are two market frictions that are well known in the literature for preventing people from switching to a new and cheaper provider. Previous experimental literature has studied these two frictions in isolation. However, field evidence shows that these two frictions frequently occur together. Recently, a theoretical framework has been developed (Wilson in Eur Econ Rev 56(6):1070–1086) which studies the interplay between these two costs. We report on an experiment testing this theory to see if individual behaviour (...) with search and switching costs is in line with the theoretical predictions derived from the optimal choice rule of Wilson. The results show the crucial role of the search strategy: not only, according to Wilson model, the search cost has a greater deterrent impact on search than the switching costs, but also the sub-optimality of the search strategy is the major source of sub-optimality in the switching behaviour. (shrink)

Since our visual perception of physical things essentially involves our identifying objects by their colours, any theory of visual perception must contain some account of the colours of things. The central problem with colour has to do with relating our normal, everyday colour perceptions to what science, i.e. physics, teaches us about physical objects and their qualities. Although we perceive colours as categorical surface properties of things, colour perceptions are explained by introducing physical properties like reflectance profiles or dispositions to (...) cause certain experiences in normal human perceivers. Hence, it seems as if colours as they are experienced by us have no place in the physical world, because they are fundamentally different from the properties which we ascribe to physical objects in scientific accounts of colour perceptions. This special issue on perspectives on colour perception presents new suggestions to solve to this major problem. (shrink)

This is an account of my work on experimental economics over the years.