Satisficing
Economists used to assume people maximize. You evaluate all options, calculate expected utility, choose the best one.
Herbert Simon pointed out the obvious problem: evaluation isn’t free. Finding the optimal apartment means seeing all apartments. Finding the optimal hire means interviewing all candidates. The search itself costs time and energy that could go elsewhere.
Simon proposed satisficing — satisfy plus suffice. Establish criteria in advance. Take the first option that meets them. The apartment with enough space, close enough to work, cheap enough. Stop searching when “good enough” appears.
This is rational when search costs exceed marginal gains. The difference between the 90th-percentile option and the 95th-percentile option rarely justifies the cost of finding it.
I find this surprisingly hard to do in practice. The maximizing impulse is strong. What if the next one is better? What if I’m settling?
But Barry Schwartz’s research suggests maximizers are actually less happy. More options create more regret. The maximizer who chose the best available still wonders about the options they didn’t see. The satisficer, having met their threshold, moves on.
The skill is setting thresholds correctly. Too high and you search forever. Too low and you settle for inadequate outcomes.
Most decisions don’t deserve much deliberation. Most products don’t need to be the best. Most hires don’t need to be perfect. Good enough, most of the time, is good enough.
Go Deeper
Books
- Administrative Behavior by Herbert Simon — Where bounded rationality first appears.
- The Paradox of Choice by Barry Schwartz — When maximizing backfires.
Related: slack, useful fictions