Have you ever tried to compare the pros and cons of all brands and types of pens, before choosing ‘The One’? Most likely not. It would have taken too much time and energy just to pick a pen. You would have picked one that is minimally functional and comfortable to use. This is a form of decision-making strategy called ‘satisficing’ – a portmanteau of satisfy and suffice. The former strategy would be ‘maximising’. In a world where you have countless choices to make, being a maximiser at all times would be near impossible.
Watch this video on the paradox of choice:
Satisficing is a term coined by economist Herbert Simon, a Nobel Prize winner for his study of decision-making. The idea of satisficing, where the decision-maker makes a satisfactory solution rather than a optimal one, is based on the core concept of bounded rationality in economics. Bounded rationality is the idea that when people make decisions, they limited by certain constraints such as lack of perfect information, cognitive limitations, and time constraint.
No one is purely a maximiser or a satisficer. In different domains, some people may tend towards being maximisers, while others have the tendency to be satisficers. With different priorities in life, there are appropriate contexts to apply either of the decision-making strategies.
When, and why satisfice?
For the less important areas of life with low-stake decisions, we should probably aim to be satisficers so as not to get bogged down with the minor details. This way, we would not waste our cognitive capacity on the not-so-important decisions. Furthermore, research has shown that satisficers are less likely to experience regret in their choices even if a better one comes along. This is compared to maximisers who are more likely to be perfectionists, and experience lower levels of happiness and self-esteem even though they achieve better outcomes than satisficers overall.
The dangers of trying to maximise, and perfecting all our decisions are paralysis, fear of failure, and decision fatigue. This is what most people experience when they overthink decisions, and eventually give up on making one and take no action at all. In the realm of entrepreneurship, business leaders have to adopt the mindset of satisficing as they have to make good-enough decisions even in the face of uncertainty and limited information. Otherwise, things may not even happen when people are stuck in thinking or planning mode.
However, there are decisions in life which would have significant and long-lasting impact on our happiness, wellbeing, or even safety. Those would require more than satisficing. For instance, you would not expect less than a highly competent surgeon to perform a high-risk surgery.
The way forward is to pick our battles (and decisions) wisely. Choose to deliberate on things that truly matter, and let the rest be good enough.
Questions for further personal evaluation:
- In what ways do you satisfice or maximise?
- When was the last time you experienced choice paralysis? How did you overcome it?
Useful vocabulary:
- ‘exhaustive’: fully comprehensive
Here are more related articles for further reading:
- The Thoughtful Gamer: Satisficing can be used to play games strategically
“Understanding satisficing can also help you strategically, as you can use the idea to help predict your opponent’s play. Think about this: everyone in the game is going to be satisficing to some degree, so you can try to predict their play based on how long they took to make a decision (relative to their normal).
Games usually have main strategies that are fairly obvious, to help bring people into the game easily. If someone has started pursuing one of those strategies, that will be their new threshold for decision making. They’re going to be weighing other decisions against the general path they’ve already started down. Combine that with the human tendency to make the sunk cost fallacy, and you can make reasonable assumptions that opponents will probably continue along the same strategic paths.
If you know your opponents well, you can also use that knowledge to try to predict their actions. People tend to have a bias towards solutions that are familiar to them, so you can assume that their satisficing thresholds will lean towards familiar strategies or attitudes.”
- The Atlantic: Economists once thought consumers could be perfectly rational, but it is impossible in reality.
“The fortress of classic economics was built on the slushy marsh of rational consumer theory. The once-popular belief that we all possess every relevant piece of information to make choices about buying fridges, TVs, or whatever, has since given way to a less commendable, but more accurate, description of buyers, which is that we basically have no freaking clue what we’re doing most of the time. Prices, marketing, discounts, even the layout of store and shelves: They’re all hazards strewn about the obstacle course of decision-making, tripping us up, blocking our path, and nudging us toward choices that are anything but rational.”
Picture credits:https://pixabay.com/en/background-cubes-choice-one-yellow-2492010/