The word satisfice was coined by Herbert Simon. He pointed out that human beings lack the cognitive resources to maximize: we usually do not know the relevant probabilities of outcomes, we can rarely evaluate all outcomes with sufficient precision, and our memories are weak and unreliable. A more realistic approach to rationality takes into account these limitations: This is called bounded rationality.
In cybernetics, satisficing is optimization where all costs, including the cost of the optimization calculations themselves and the cost of getting information for use in those calculations, are considered.
As a result, the eventual choice is usually sub-optimal as regards the main goal of the optimization, i.e. different from the optimum in the case that the costs of choosing are not taken into account.
During a 1997 game against Deep Blue, Garry Kasparov, after being defeated in a game where his computer opponent adopted a satisficing position, remarked that the computer was "playing like a human." Kasparov later explained that, when playing computers, chess masters could often defeat them by predicting the most "rational" move; however, satisficing made such prediction unreliable.
Reference: Klaus Krippendorff's "A Dictionary of Cybernetics".
In Social cognition, Jon Krosnick proposed a theory of survey satisficing which says that optimal question answering involves a great deal of cognitive work and that some people would use satisficing to reduce that burden. Some people may shortcut their cognitive processes in two ways:
Likelihood to satisfice is linked to respondent ability, respondent motivation and task difficulty
Regarding survey answers, satisficing manifests in:
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.
Simon, as a further example, once explained satisficing to his students by describing a mouse searching for cheese in a maze. The mouse might begin searching for a piece of Gouda, but unable to find any would eventually be "satisfied" and could "suffice" with any piece of cheese, such as cheddar.
Satisficing occurs in consensus building when the group looks towards a solution everyone can agree on even if it may not be the best.
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 (Castagnoli and LiCalzi, 1996; Bordley and LiCalzi, 2000; Bordley and Kirkwood, 2004).
Research Note: Attitudes to Growth Among Owners of Small and Medium-sized Enterprises and the Implications for Business Advice: Some Evidence from the Clothing Industry in Coventry.
Apr 01, 2001; THIS NOTE REPORTS RESULTS OF research into the factors which impede the growth of employment in small and medium sized...
An Institutional Explanation and Model of the Factors Influencing Room Rate Pricing Decisions in the Irish Hotel Industry
Jan 01, 2007; ABSTRACT This paper reports on a study of room rate pricing in the Irish hotel industry. The paper views pricing as a social and...