Satisficing is one of my favorite concepts and words. Yes, my name is Richard Mayhew and I am a nerd of unusual size.
And in a just world, satisficing and the related concept of bounded rationality would have made Milton Friedman a very smart, very interesting thinker who had some excellent things to say about the world around us and not the economic intellectual father of the current socio-political superstructure that is around us today.
Satisficing, a portmanteau of satisfy and suffice, is a decision-making strategy that attempts to meet an acceptability threshold. This is contrasted with optimal decision-making, an approach that specifically attempts to find the best option available. A satisficing strategy may often be (near) optimal if the costs of the decision-making process itself, such as the cost of obtaining complete information, are considered in the outcome calculation.
The word satisfice was given its current meaning by Herbert A. Simon in 1956, although the idea “was first posited in Administrative Behavior, published in 1947.” He pointed out that human beings lack the cognitive resources to optimize: we usually do not know the relevant probabilities of outcomes, we can rarely evaluate all outcomes with sufficient precision, and our memories are weak and unreliable. A more realistic approach to rationality takes into account these limitations: This is called bounded rationality.
And here is a good example:
- Example: A task is to sew a patch onto a pair of jeans. The best needle to do the threading is a 4 inch long needle with a 3 millimeter eye. This needle is hidden in a haystack along with 1000 other needles varying in size from 1 inch to 6 inches. Satisficing claims that the first needle that can sew on the patch is the one that should be used. Spending time searching for that one specific needle in the haystack is a waste of energy and resources.
Another useful example is thinking about picking up an attractive person to hook up with as graphed against time at the bar. Early in the night, individuals may be attempting to optimize the matching process and hook-up with the most attractive person who is willing to say yes to them. As the night goes on and failure to score with the 10, the decision process changes until at last call, the decision is to hook up with whomever is willing to say yes. This is slightly different than the decision process described in A Beautiful Mind bar scene, although all of the men in that scene were engaged in satisficing decision making.