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You are here: Home / Anderson On Health Insurance / I aint got no Satisficing

I aint got no Satisficing

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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.

Wikipedia has a good definition and example:

Satisficing, a portmanteau of satisfy and suffice,[1] 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,[2] although the idea “was first posited in Administrative Behavior, published in 1947.”[3][4] 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.   

 

Reader Interactions

46Comments

  1. 1.

    c u n d gulag

    Ah, the old, “a 2 at 10, becomes a 10 at 2.”

    I get it!

    And I believe that applies to both sexes, and all sexual orientations.

  2. 2.

    negative 1

    I love this example. So if I were a disciple of Adam Smith I’d measure hotness by how many people were hitting on the lady, if I were a disciple of Keynes I’d compare the differences in pleasure between hitting on each lady, if I were a disciple of Ayn Rand I’d just go for someone’s wife, if I were a disciple of Veblen I’d go for my friend’s date, and if I were a disciple of Marx I’d realize that the women were just distractions from my true task — drinking.
    I love economics.

  4. 4.

    Joseph Nobles

    House GOP can’t get no satisficing. Their debt ceiling demands have leaked to the National Review. They stopped short of asking for the long-form birth certificate.

    And among all the craziness they piled up, they want to extend the debt ceiling for a year. No limit! One simple year of no ceiling. So that at the end of September 2014, we can do this all again two months before the Congressional midterm elections.

    And they could pass this bill by Saturday.

  10. 10.

    RSA

    I once had a brief argument with Herb Simon, in a symposium about automated methods for scientific discovery. I think I held my own, and it was a minor issue, but it was still scary–grad student against Nobel laureate.

    Also, I didn’t realize it until years later, but Simon is an ancestor in my academic genealogy: great-great grand dissertation advisor.

  12. 12.

    cleek

    nine out of ten firebaggers agree that “satisficing” is the same as wanting the opposite of what you claim to want. and of those nine, eight can’t count to sixty.

  13. 13.

    Richard Mayhew

    @RSA: I knew Professor Simon through a couple of seminars/conferences etc at the end of his life and the start of my career. He was always a gentleman and as long as you were willing to think and think hard, always willing to talk through a problem. My area of interests were far from his, but the guy was such a polymath, he was up to speed by about the third sentence on anything except the problems of the 3-4 1 gap defense against teams with precision passing attacks.

  16. 16.

    RJB

    That scene always annoyed me. First, it gets the logic wrong even under its own assumptions that everyone has the same preferences and the women have limited agency (they can only choose among the men who approach them). It is NOT an equilibrium for everyone to avoid the beautiful woman and concentrate on the others, because one of the men will regret their choice: they could have had their first choice with no competition! In the ridiculously oversimplified setup assumed in the scene, I suspect the equilibrium would involved mixed strategies: each guy would choose a probability of hitting on the blonde.

    Of course, in real life, the game is a lot easier. The guys split their time chatting up the different women.

    Oh, and by the way, my wife tells me that women can actually make up their own minds about stuff, and even pursue their own preferences.

  20. 20.

    dmsilev

    @Ash Can: With, I assume, a bunch of Tea Party types in the background with metaphorical knives aimed at his back.

    Or, given the way things have been going recently, they may not be metaphorical.

  23. 23.

    RSA

    @Richard Mayhew:

    the guy was such a polymath, he was up to speed by about the third sentence on anything except the problems of the 3-4 1 gap defense against teams with precision passing attacks.

    :-)

    Simon should be widely recognized as one of the giant intellects of the 20th century. It’s hard to think of people who have made deeper contributions to such a wide range of disciplines: artificial intelligence and cognitive psychology (along with Newell), behavioral economics, organization theory, computer science, … Pretty amazing.

  25. 25.

    Ash Can

    @dmsilev: Actually, based on my glances at the muted TV in the next room, Boehner spoke for a few moments and then gave the floor to Eric Cantor. Oh, and now he’s done too. That was quick. (Either that, or Bloomberg cut away in favor of more substantive programming regarding the latest merger news in the tech industry.)

  26. 26.

    Belafon

    @RJB:
    Also:

    Oh, and by the way, my wife tells me that women can actually make up their own minds about stuff, and even pursue their own preferences.

    So can most men. And yet most of human behavior can be described by a statistical distribution. We’re unique and yet not really that different.

  29. 29.

    Richard Mayhew

    @Belafon: There is always an XKCD about the topic, always — not quite the immutable law of Rule 34 of the Internet, but it is close.

  31. 31.

    aimai

    @Belafon: I think that’s a misreading of RJB’s point. He’s not saying “women are individuals and can’t be described by a general proposition”–he’s saying that the women in the scenario, like the men, have agency and possibly quite different strategies and goals than those the men/filmmaker ascribe to them.

  35. 35.

    Fair Economist

    For a modern who is upper-middle class or above, decision-making and self-control are basically the only limiting factors. So optimizing is almost never optimal because the decision-making cost is the limiting factor. Interestingly, the isn’t normally a way to optimize optimization because it virtually always involves discovery of unknown information. So a well-off modern is forced to satisfice because they really *can’t* do anything else.

  37. 37.

    cmorenc

    @RJB:

    That scene always annoyed me. First, it gets the logic wrong even under its own assumptions that everyone has the same preferences and the women have limited agency (they can only choose among the men who approach them).

    No, the logic is not wrong, because what it addresses is the possibilities for a group of guys to initiate contact with a group of women without immediately screwing up the chances for successful social interaction with any of them by inadvertently provoking a preemptive “none of the above” response from the women. Of course in contemporary times in the USA, women are also free to take the initiative to contact whichever among the group of men they wish to tentatively interact with. The film clip is set in a different time several decades ago when social conventions were a bit different than they are now.

    Nevertheless, the logical thrust of the scene remains valid:
    1) Yes, the guys could sit at their table and wait to see whether the women initiated contact, and if so, which guy each particular woman chose to initially focus on interacting with.
    2) However, if the guys chose to take the initiative to approach the women, the dynamic is correct: somehow, each guy will soon wind up focusing more on one or the other of the women, and the scene does accurately capture some of the main game theory dynamics of how the guys can screw things up right from the get-go, unless perhaps they all sit back and wait for the women to presumptively make all the choices for them. Is that what they’re supposed to do according to you?

  38. 38.

    ? Martin

    A friend of my dad’s told me early on: “The hottest girl will wind up being the one who is most into you. Pay a bit more attention to the girls paying attention to you and a bit less to the prettiest one in the room.”

  39. 39.

    Belafon

    @aimai: I understand what you are saying, but if I remember correctly, Nash left before we saw what the women were going to do. Yes, the full scene would require factoring in what the women were thinking, but mathematical models tend to be simplifications. And Nash was pulling a Sheldon in the scene: Once he saw the math, the social interaction went out the window.

    His wife’s comment just reminded me of something I hear from people a lot. I didn’t state that very clearly.

  40. 40.

    cvstoner

    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.

    I believed this is summed up by the phrase “A 2 at 10 is a 10 at 2”

  44. 44.

    cmorenc

    @cvstoner:

    I believed this is summed up by the phrase “A 2 at 10 is a 10 at 2″

    Also, beer goggles tend to work far better at 2am than at 10pm. This is equally true for both men and women.

  46. 46.

    SpaceSquid

    I’ve sat through a few talks on the nature of satisficing, and I confess I’ve never entirely understood why you can’t just add another dimension and optimise over the new space. To take the needle example, it’s clearly foolish to waste too much time searching for the perfect needle, but that means one should be optimising over a function which takes time into account as well as needle length.

    I’m quite sure this is a tremendously naïve comment, but it’s something that always comes to mind when I see that example and ones like it.

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