IDEAS home Printed from https://ideas.repec.org/p/ags/ifma11/345567.html
   My bibliography  Save this paper

PR - How Business Management Games Can Be Used To Analyze The Boundedly Rational Behaviour Of Economic Agents (p388-395)

Author

Listed:
  • Hengel, Philipp
  • Hirschauer, Norbert
  • Mußhoff, Oliver

Abstract

Regulatory policies often aim to steer the behaviour of economic agents by changing their economic environment. Assessing the potential impacts of regulatory policies requires predictions about how humans adapt to such changes. One important prerequisite for meaningful policy impact analysis is in-depth knowledge of why and to what extent economic agents behave in a boundedly rational way. We propose that business management games be used to contribute towards better understanding of agent behaviours since they provide an inexpensive opportunity to reach beyond existing anecdotal evidence concerning “behavioural anomaliesâ€. Modifying an existing business management game in which investment, financing and production decisions have to be made, we demonstrate how bounded rationality can be quantified and separated into its two components: incomplete information and limited cognitive abilities. The resulting data show that decisions made by participants in this game are strongly influenced by bounded rationality. They also show that both incomplete information and limited cognitive abilities are relevant components of the bounded rationality displayed by players.

Suggested Citation

  • Hengel, Philipp & Hirschauer, Norbert & Mußhoff, Oliver, 2011. "PR - How Business Management Games Can Be Used To Analyze The Boundedly Rational Behaviour Of Economic Agents (p388-395)," 18th Congress, Methven, New Zealand, 2011 345567, International Farm Management Association.
    • Handle: RePEc:ags:ifma11:345567
    DOI: 10.22004/ag.econ.345567
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/345567/files/11_Hengel_etal_P388-395.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.345567?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Charles A. Holt, 1999. "Teaching Economics with Classroom Experiments: A Symposium," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 603-610, January.
    2. Schoemaker, Paul J H, 1982. "The Expected Utility Model: Its Variants, Purposes, Evidence and Limitations," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 529-563, June.
    3. John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
    4. Hudson, Darren, 2003. "Problem Solving and Hypothesis Testing Using Economic Experiments," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 35(2), pages 337-347, August.
    5. John W. Longworth, 1970. "From War-Chess To Farm Management Games," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 18(2), pages 1-11, July.
    6. W. Brian Arthur, 1994. "Inductive Reasoning, Bounded Rationality and the Bar Problem," Working Papers 94-03-014, Santa Fe Institute.
    7. John W. Longworth, 1969. "Management Games And The Teaching Of Farm Management," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 13(1), pages 58-67, June.
    8. Longworth, John W., 1969. "Management Games And The Teaching Of Farm Management," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 13(1), pages 1-10, June.
    9. Brian E. Roe & David R. Just, 2009. "Internal and External Validity in Economics Research: Tradeoffs between Experiments, Field Experiments, Natural Experiments, and Field Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(5), pages 1266-1271.
    10. Arthur, W Brian, 1994. "Inductive Reasoning and Bounded Rationality," American Economic Review, American Economic Association, vol. 84(2), pages 406-411, May.
    11. Rubinstein, Ariel, 1991. "Comments on the Interpretation of Game Theory," Econometrica, Econometric Society, vol. 59(4), pages 909-924, July.
    12. Dr. Ger Trip & Prof. dr. ir. Ruud B. M. Huirne & Prof. dr. ir. Jan A. Renkema, 2001. "Evaluating Farmers' Choice Processes in the Laboratory: Workshops with Flower Producers," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 23(1), pages 185-201.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mußhoff, Oliver & Hirschauer, Norbert & Hengel, Philipp, 2011. "Sind Unternehmensplanspiele ein geeignetes Instrument zur Analyse begrenzter Rationalität und tatsächlichen Entscheidungsverhaltens?," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 60(03), pages 1-16, August.
    2. Mußhoff, Oliver & Hirschauer, Norbert & Hengel, Philipp, 2011. "Sind Unternehmensplanspiele ein geeignetes Instrument zur Analyse begrenzter Rationalität und tatsächlichen Entscheidungsverhaltens?," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 60(3).
    3. Zhao, Zhijun & Zhang, Xiaoqi, 2022. "A continuous heterogeneous-agent model for the co-evolution of asset price and wealth distribution in financial market," Chaos, Solitons & Fractals, Elsevier, vol. 155(C).
    4. Agnieszka Gehringer, 2015. "New evidence on the determinants of current accounts in the EU," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(4), pages 769-793, November.
    5. Christoph Zott, 2002. "When Adaptation Fails," Journal of Conflict Resolution, Peace Science Society (International), vol. 46(6), pages 727-753, December.
    6. Delli Gatti,Domenico & Fagiolo,Giorgio & Gallegati,Mauro & Richiardi,Matteo & Russo,Alberto (ed.), 2018. "Agent-Based Models in Economics," Cambridge Books, Cambridge University Press, number 9781108400046, January.
    7. Troy Tassier, 2013. "Handbook of Research on Complexity, by J. Barkley Rosser, Jr. and Edward Elgar," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 39(1), pages 132-133.
    8. Ott, Ursula F., 2013. "International Business Research and Game Theory: Looking beyond the Prisoner's Dilemma," International Business Review, Elsevier, vol. 22(2), pages 480-491.
    9. Antonio Doria, Francisco, 2011. "J.B. Rosser Jr. , Handbook of Research on Complexity, Edward Elgar, Cheltenham, UK--Northampton, MA, USA (2009) 436 + viii pp., index, ISBN 978 1 84542 089 5 (cased)," Journal of Economic Behavior & Organization, Elsevier, vol. 78(1-2), pages 196-204, April.
    10. Rothenstein, R & Pawelzik, K, 2003. "Evolution and anti-evolution in a minimal stock market model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 326(3), pages 534-543.
    11. Maria Minniti & William Bygrave, 2001. "A Dynamic Model of Entrepreneurial Learning," Entrepreneurship Theory and Practice, , vol. 25(3), pages 5-16, April.
    12. Kristoufek, Ladislav & Vošvrda, Miloslav S., 2016. "Herding, minority game, market clearing and efficient markets in a simple spin model framework," FinMaP-Working Papers 68, Collaborative EU Project FinMaP - Financial Distortions and Macroeconomic Performance: Expectations, Constraints and Interaction of Agents.
    13. Tatsuya Iwase & Yukihiro Tadokoro & Daisuke Fukuda, 2017. "Self-Fulfilling Signal of an Endogenous State in Network Congestion Games," Networks and Spatial Economics, Springer, vol. 17(3), pages 889-909, September.
    14. Kets, W., 2007. "The Minority Game : An Economics Perspective," Other publications TiSEM 65d52a6a-b27d-45a9-93a7-e, Tilburg University, School of Economics and Management.
    15. Pietro Guarnieri & Lorenzo Spadoni, 2024. "Norms and anti-coordination: elicitation and priming in an El Farol Bar Game experiment," Discussion Papers 2024/303, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    16. Bell, Peter N, 2013. "New Testing Procedures to Assess Market Efficiency with Trading Rules," MPRA Paper 46701, University Library of Munich, Germany.
    17. Bischi, Gian Italo & Merlone, Ugo & Pruscini, Eros, 2018. "Evolutionary dynamics in club goods binary games," Journal of Economic Dynamics and Control, Elsevier, vol. 91(C), pages 104-119.
    18. Luis Alfonso Dau & Aya S. Chacar & Marjorie A. Lyles & Jiatao Li, 2022. "Informal institutions and international business: Toward an integrative research agenda," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(6), pages 985-1010, August.
    19. Romulus Breban, 2011. "Health Newscasts for Increasing Influenza Vaccination Coverage: An Inductive Reasoning Game Approach," PLOS ONE, Public Library of Science, vol. 6(12), pages 1-10, December.
    20. Petra Ahrweiler, 2017. "Agent-based simulation for science, technology, and innovation policy," Scientometrics, Springer;Akadémiai Kiadó, vol. 110(1), pages 391-415, January.

    More about this item

    Keywords

    Agribusiness;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ifma11:345567. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ifmaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.