Satisficing in sales competition: experimental evidence

In a duopoly market, aspirations express how much sellers want to earn given their expectations about the other's behavior. We define individually and mutually satisficing sales behavior for given individual beliefs and aspirations. In a first experimental phase, whenever satisficing is not possible, beliefs, aspirations, or sales have to be adapted. In a second phase, testing the absorption of satisficing, participants are free to select nonsatisficing sales profiles. The results reveal that most people are satisficers who, either mandatorily or deliberately, tend to adjust aspiration levels if they cannot be satisfied.

Satisficing in sales competition : experimental evidence

In a duopoly market, aspirations express how much sellers want to earn given their expectations about the other's behavior. We define individually and mutually satisficing sales behavior for given individual beliefs and aspirations. In a first experimental phase, whenever satisficing is not possible, beliefs, aspirations, or sales have to be adapted. In a second phase, testing the absorption of satisficing, participants are free to select nonsatisficing sales profiles. The results reveal that most people are satisficers who, either mandatorily or deliberately, tend to adjust aspiration levels if they cannot be satisfied

Applications of numerical computation methods in microeconomic theory

The solution of mathematical problems by numerical analysis is a large, intricate subject in its own right, and the substance-of many Ph. D. theses in mathematics. The advancement of numerical analysis and computer technology are clearly not mutually exclusive. Moreover this combination through the growth in computer software facilities is' easily within reach of a researcher with no expertise in either numerical analysis or computer programming. In particular the Numerical Algorithms Group (NAG) based in Oxford provides a library of subroutines for incorporation into source programmes across a broad spectrum of mathematics. The relevance of this development for the economist lies with the considerable scope for providing quantitative evaluations of microeconomic models outside of traditional statistical methods. To justify such a claim the thesis develops a number of applications from microeconomic theory: imperfect information in a non-sequential search framework; optimum tax with endogenous wages; a two sector general equilibrium model of union and non-union wage rate determination; Chamberlin's welfare ideal; and a quantity setting duopoly analysis of the structure conduct performance paradigm. It is hoped that the insights gained from such diverse topics will convince the reader as to the appropriateness of applying numerical computing to microeconomic questions in general, and the usefulness of the NAG software in particular

Essays on Information Economics in Games

My dissertation focuses on information economics in games. In Chapter II, ``Optimal Disclosure of Private Information to Competitors", I consider a duopoly model with differentiated substitutes, price competition, and uncertain demand, in which one firm has an information advantage over a competitor. I study the incentives of the informed firm to share its private information with its competitor and the incentives of a regulator to control disclosure in order to benefit consumers. I show that full disclosure of information is optimal for the informed firm, because it increases price correlation and surplus extraction from consumers. I also show that the regulator can increase expected consumer surplus and welfare by restricting disclosure, but that, surprisingly, consumers can benefit from the regulator privately disclosing some information to the competitor. My findings highlight the consequences of an unequal distribution of consumer data between firms on welfare allocation. They also inform an ongoing policy debate about regulating what data online platforms release to other firms who offer goods on its platform. In Chapter II, ``Strategic Incentives and the Optimal Sale of Information", I study the optimal sale of information by a monopolist data-seller to multiple privately informed data-buyers who play a two-stage game of incomplete information. In the information stage, data-buyers can simultaneously acquire supplemental information to reduce their uncertainty about the state. In the action stage, data-buyers simultaneously select an action to maximize their expected payoffs. The data-seller offers a menu of Blackwell experiments and prices to screen between two types of data-buyers. I show that the nature of data-buyer's preferences for information allows the data-seller to extract all surplus from data-buyers, distorting the information provided to the low type such that the high type is indifferent between both experiments. I also show that the features of the optimal menu are determined by the interaction between data-buyers' strategic incentives in the action stage and the correlation of their private information. This interaction can expand the data-seller's ability to serve all segments of the market, increasing expected profits. In Chapter IV, ``Product reviews - Information Source or Persuasion Device?", which is joint work with Anne-Katrin Roesler, we study the optimal design of review systems by a platform that has the best interest of consumers in mind. We consider a setting in which a seller offers a good of ex-ante unknown quality through a platform with a review system to sequentially arriving short-lived heterogeneous buyers. Reviews from previous buyers provide consumers with information about the good's quality. Based on the review system, the seller chooses an optimal pricing scheme. Buyers make their purchasing decision based on the information available through reviews, their type, and the price. In a two period setting, we approximate the optimal review system by characterizing the optimal K-piecewise linear distribution over posterior quality estimates.PHDEconomicsUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/169751/1/rorodrig_1.pd

The Endogenous Value of Information”

This doctoral thesis examines the value of information in settings, where two or more agents interact. In such situations, contrary to one-person decision problems, a more informative signal is not necessarily more valuable, and it may be profit-maximizing for an information seller to deliberately garble or damage his signal before selling it to another agent. More generally, the value of information depends on the precise contractual arrangement under which the information is to be transferred and used. I examine the following applications: (i) value of information in portfolio decision problems; and (ii) the transfer of information to a wealth-constrained investor. In a multiagent setting I examine (iii) the value of hared information services; and (iv) the value of information and flexibility for screening a heterogeneous consumer base

Investment Under Uncertainty, Market Evolution and Coalition Spillovers in a Game Theoretic Perspective.

The rationality assumption has been the center of neo-classical economics for more than half a century now. In recent years much research has focussed on models of bounded rationality. In this thesis it is argued that both full and bounded rationality can be used for different kind of problems. In the first part full rationality is assumed to analyse technology adoption by firms in a duopolistic and uncertain environment. In the second part, boundedly rational models are developed to study the evolution of market structure in oligopolistic markets as well as price formation on (possibly) incomplete financial markets. The third part of the thesis presents an alternative to the framework of Transferable Utility games in cooperative game theory. The model introduced here explicitly takes into account the outside options that players often have in real-life situations if they choose not to participate in a coalition.