Satisficing search versus aspiration adaptation in sales competition: experimental evidence

Abstract

In a duopoly market, aspiration levels express how much sellers want to earn given their expectations about the other’s behavior. We augment the sellers’ decision task by eliciting their profit aspiration. In a first experimental phase, whenever satisficing is not possible, sales choices, point beliefs, or aspiration levels have to be adapted. This allows us to compare “aspiration-based satisficing” to “aspiration adaptation”. In a second phase, testing the absorption of satisficing, participants are free to select non-satisficing sales profiles. The results reveal that most participants are satisficers who, in line with aspiration adaptation theory, tend to adjust aspiration levels and to keep sales behavior nearly unchanged.