SATISFICE

Satisfice, a combination of the words “satisfy” and “suffice,” is a decision-making strategy that explores available options until a satisfactory solution is achieved (Simon, 1956). This approach is also known as satisficing, a term coined by Nobel Laureate Herbert Simon to describe the process of balancing the cost of perfect accuracy with the time, effort, and resources needed to achieve it (Simon, 1956). In contrast to optimizing, which involves finding the best possible solution from all available options, satisficing seeks to identify an acceptable solution quickly.

The satisficing approach has been used across a range of disciplines, from economics and psychology to engineering and management (Simon, 1956; March & Simon, 1958; Gigerenzer & Goldstein, 1996; Klein, 1998; Dutta, 2006). For example, in economics, satisficing can be used to explain how consumers make decisions about purchases (Simon, 1956). In engineering, satisficing is often used to identify a satisfactory solution when the cost of optimizing is too high (Klein, 1998). Similarly, in management, satisficing can be a useful tool for decision-makers who are constrained by limited resources and time (Dutta, 2006).

Despite its widespread use, satisficing has several limitations. First, it does not guarantee that the chosen solution is the best possible one (Simon, 1956). Second, when faced with a complex decision problem, it can be difficult to determine when a satisfactory solution has been achieved (Gigerenzer & Goldstein, 1996). Finally, when used in certain contexts, satisficing can lead to suboptimal outcomes (Klein, 1998).

Overall, satisficing is an effective decision-making strategy for situations in which the cost of optimizing is too high. However, its limitations should be taken into account when considering its use.

References

Dutta, S. (2006). Managing in the new global context. Upper Saddle River, NJ: Pearson Prentice Hall.

Gigerenzer, G., & Goldstein, D. G. (1996). Reasoning the fast and frugal way: Models of bounded rationality. Psychological Review, 103(4), 650-669.

Klein, G. (1998). Sources of power: How people make decisions. Cambridge, MA: MIT Press.

March, J. G., & Simon, H. A. (1958). Organizations. New York, NY: John Wiley & Sons.

Simon, H. A. (1956). Rational choice and the structure of the environment. Psychological Review, 63(2), 129-138.

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