Satisficing - Decision Making

Decision Making

In decision making, satisficing explains the tendency to select the first option that meets a given need or select the option that seems to address most needs rather than the “optimal” solution.

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.

Satisficing also occurs in consensus building when the group looks towards a solution everyone can agree on even if it may not be the best.

Example: A group spends hours projecting the next fiscal year's budget. After hours of debating they eventually reach a consensus, only to have one person speak up and ask if the projections are correct. When the group becomes upset at the question, it is not because this person is wrong to ask, but rather because they have come up with a solution that works. The projection may not be what will actually come, but the majority agrees on one number and thus the projection is good enough to close the book on the budget.

In many circumstances, the individual may be uncertain about what constitutes a satisfactory outcome. For example, an individual who only seeks a satisfactory retirement income may not know what level of wealth is required—given uncertainty about future prices—to ensure a satisfactory income. In this case, the individual can only evaluate outcomes on the basis of their probability of being satisfactory.

If the individual chooses that outcome which has the maximum chance of being satisfactory, then this individual's behavior is theoretically indistinguishable from that of an optimizing individual under certain conditions

Satisficing is often a good option when making a decision, but it can also be detrimental if used the wrong way. For example, when considering a medical issue such as a diagnosis, satisficing is not the best decision making strategy to use. On the other hand, when choosing an outfit or an option from a menu, it can be helpful. When there is an unlimited amount of information available and it is necessary to eliminate options, satisficing is beneficial because it helps the person making the decision effectively and efficiently reach a conclusion.