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Satisficing and maximizing consumers in a monopolistic screening model

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  • Papi, Mauro

Abstract

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 a boundedly rational consumer never exchanges satisfactory with unsatisfactory alternatives implies that he/she never ends up with an alternative strictly better than his/her aspiration levels.

Suggested Citation

  • Papi, Mauro, 2013. "Satisficing and maximizing consumers in a monopolistic screening model," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 385-389.
    • Handle: RePEc:eee:matsoc:v:66:y:2013:i:3:p:385-389
    DOI: 10.1016/j.mathsocsci.2013.08.005
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    References listed on IDEAS

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