What does it mean?
Wikipedia says: Satisficing “is a decision-making strategy that attempts to meet criteria for adequacy, rather than to identify an optimal solution.” The study is mainstream enough now that it’s showing up in Intro Psych books. Nifty.
Sometimes it is best to optimize. Sometimes (ironically) satisficing is really the optimal way to make a decision.
The key is that most decisions take time to make and some even require additional effort on top of the time.
Say you’re an employer. Obviously you want top employees. But you may want the *best* employee when you’re trying to decide between 50 applicants/10 finalists for a CEO position. You would want to optimize. However, if you’re hiring for 5 retail positions and have 5000 applicants, you probably just want employees that meet a certain standard. You’ll take the first 5 people who meet that standard and stop interviewing after they’ve been chosen. There may be more qualified or better candidates that never made it to the interview, but the additional benefit from those candidates (times the probability that they actually are better) would not outweigh the additional costs of searching.
There is a famous study looking at jam. People bought more jam when they got to choose between 6 types of jam than when they had to choose between 24 types. The theory is that when given too many choices, they became paralyzed and rather than optimizing, they made no choice at all. They’re paralyzed by the paradox of choice. Not so important when we’re talking about buying jam, but tremendously important when we’re trying to figure out insurance or retirement or any other number of difficult decisions. Can you blame me for just going with the super expensive Ing guy who came to my door?
People who optimize tend to objectively make better choices. BUT people who satisfice tend to be happier with their choices, even if they’re not optimal. When you optimize you worry that you made the wrong choice, that there’s something better out there. Your loss aversion goes into high gear. When you satisfice, you know that there’s probably a better choice out there, but you are controlling the decision not to bother finding it. AND you saved a bunch of time not looking for it. You know your choice was good enough compared to the objective measure you picked.
Optimize when it is really easy to do or when the added benefits from optimizing are large (or the added problems from not optimizing are large). Satisfice for everything else and stop worrying about it.
Another life-changing book for us was The Paradox of Choice by Barry Schwartz. Definitely worth a read.
As Voltaire said, “The perfect is the enemy of the good“