Speaker: Rajiv Sarin (University of Exeter)
Title of the talk: “A Model of Satisficing”
Date, Time and Venue: Thursday, 17 August 2017, 2:00-3:00 pm, room 260-323 [Business School Building, Level 3]
Abstract: “We build a model of satisficing behaviour. We explicitly introduce the payoff the decision maker expects from a strategy, where this expectation is adaptively formed. This valuation of a strategy is differentiated from her satisficing level which is taken to be the payoff the agent expects from her best outside option. If the agent receives a payoff above her satisficing level she continues with the current action, updating her valuation of the action. If she receives a payoff below her satisficing level and her valuation of the action falls below her satisficing level she updates both her satisficing level and what she expects from the strategy. We show that in the long run, all players satisfice. In individual decision problems, satisficing behaviour results in cautious, maximin choice. In games like the Prisoner’s Dilemma and Stag Hunt, they converge to cooperative outcomes. In other games, such as canonical public good games, they converge to (selfish) Nash equilibria.”
Bio: Rajiv Sarin is Professor of Economics at the University of Exeter. He is a theorist whose research has appeared in such leading journals as American Economic Review, International Economic Review, Games and Economic Behavior and Journal of Economic Theory.