In economics, satisficing is a behaviour which attempts to achieve at least some minimum level of a particular variable, but which does not strive to achieve its maximum possible value. The most common application of the concept in economics is in the behavioural 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, although at least a critical level of profit must be achieved by firms, thereafter priority is attached to the attainment of other goals.
The word satisfice was coined by Herbert Simon in 1957. Simon says that people are only 'rational enough', and in fact relax their rationality when it is no longer required. This is called bounded rationality.
As a result, the eventual choice is usually sub-optimal as regards the main goal of the optimisation, i.e. different from the optimum in the case that the costs of choosing are not taken into account.
Reference: Klaus Krippendorff's "A Dictionary of Cybernetics".
- decision theory
- bounded rationality
- rational ignorance
- alpha-beta pruning
- frame problem
- Utility Maximization Problem
- homo economicus
- Web Dictionary of Cybernetics and Systems definition of "satisficing"
- Michael Byron. Satisficing and Optimality. Ethics 109 (1998): 67-93. A paper on satisficing considered from a philosophical viewpoint