Satisficing is a decision-making strategy or cognitive heuristic that entails searching through the available alternatives until an acceptability threshold is met, without necessarily maximizing any specific objective.
[1] The term satisficing, a portmanteau of satisfy and suffice,[2] was introduced by Herbert A. Simon in 1956,[3][4] although the concept was first posited in his 1947 book Administrative Behavior.
[5][6] Simon used satisficing to explain the behavior of decision makers under circumstances in which an optimal solution cannot be determined.
He maintained that many natural problems are characterized by computational intractability or a lack of information, both of which preclude the use of mathematical optimization procedures.
Two traditions of satisficing exist in decision-making research: Simon's program of studying how individuals or institutions rely on heuristic solutions in the real world, and the program of finding optimal solutions to problems simplified by convenient mathematical assumptions (so that optimization is possible).
It allows for predicting surprising effects such as the "cheap twin paradox", where two similar cars have substantially different price tags in the same dealership.
As a result, the eventual choice is usually sub-optimal in regard to the main goal of the optimization, i.e., different from the optimum in the case that the costs of choosing are not taken into account.
The best things would therefore be to avoid a general use of these two words.In economics, satisficing is a behavior which attempts to achieve at least some minimum level of a particular variable, but which does not necessarily maximize its value.
[17] The most common application of the concept in economics is in the behavioral theory of the firm, which, unlike traditional accounts, postulates that producers treat profit not as a goal to be maximized, but as a constraint.
Under these theories, a critical level of profit must be achieved by firms; thereafter, priority is attached to the attainment of other goals.
The idea of the aspiration level was introduced by Herbert A. Simon and developed in economics by Richard Cyert and James March in their 1963 book A Behavioral Theory of the Firm.
An equivalent way of looking at satisficing is epsilon-optimization (that means you choose your actions so that the payoff is within epsilon of the optimum).
[21] What determines the aspiration level may be derived from past experience (some function of an agent's or firm's previous payoffs), or some organizational or market institutions.
[24] Some research has suggested that satisficing/maximizing and other decision-making strategies, like personality traits, have a strong genetic component and endure over time.
Maximizers tend to use a more exhaustive approach to their decision-making process: they seek and evaluate more options than satisficers do to achieve greater satisfaction.
This is thought to be due to limited cognitive resources people have when their options are vast, forcing maximizers to not make an optimal choice.