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Satisficing

Definition

Satisficing is a decision-making strategy or cognitive heuristic that entails searching through the available alternatives until an acceptability threshold is met. The term satisficing, a portmanteau of satisfy and suffice, was introduced by Herbert A. Simon in 1956, although the concept was first posited in his 1947 book Administrative Behavior. Simon used satisficing to explain the behavior of decision makers under circumstances in which an optimal solution cannot be determined. He maintained that many natural problems are characterized by computational intractability or a lack of information, both of which preclude the use of mathematical optimization procedures. He observed in his Nobel Prize in Economics speech that "decision makers can satisfice either by finding optimum solutions for a simplified world, or by finding satisfactory solutions for a more realistic world.

What does 'Satisficing' mean

Satisficing is a decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal solution. This is because aiming for the optimal solution may necessitate needless expenditure of time, energy and resources. The term "satisfice" was coined by American scientist and Noble-laureate Herbert Simon in 1956.

Explaining 'Satisficing'

The theory of satisficing finds application in a number of fields including economics, artificial intelligence and sociology. Satisficing implies that a consumer, when confronted with a plethora of choices for a specific need, will select a product or service that is "good enough", rather than expending effort and resources on finding the best possible or optimal choice.


Further Reading


Chinese bank efficiency during the global financial crisis: A combined approach using satisficing DEA and Support Vector Machines☆
www.sciencedirect.com [PDF]
The paper examines Chinese bank efficiency with a unique sample of 127 banks during the peak period of the global financial crisis. We apply an innovative Data Envelopment Analysis method under a stochastic environment. In the first stage, within the ambit of the …

The psychology of residential developers: lessons from behavioral economics and additional explanations for satisficingThe psychology of residential developers: lessons from behavioral economics and additional explanations for satisficing
journals.sagepub.com [PDF]
The paper examines Chinese bank efficiency with a unique sample of 127 banks during the peak period of the global financial crisis. We apply an innovative Data Envelopment Analysis method under a stochastic environment. In the first stage, within the ambit of the …

Satisficing in financial decision making—a theoretical and experimental approach to bounded rationalitySatisficing in financial decision making—a theoretical and experimental approach to bounded rationality
www.sciencedirect.com [PDF]
The paper examines Chinese bank efficiency with a unique sample of 127 banks during the peak period of the global financial crisis. We apply an innovative Data Envelopment Analysis method under a stochastic environment. In the first stage, within the ambit of the …

Incorporating risk into bank efficiency: A satisficing DEA approach to assess the Greek banking crisisIncorporating risk into bank efficiency: A satisficing DEA approach to assess the Greek banking crisis
www.sciencedirect.com [PDF]
The paper examines Chinese bank efficiency with a unique sample of 127 banks during the peak period of the global financial crisis. We apply an innovative Data Envelopment Analysis method under a stochastic environment. In the first stage, within the ambit of the …

Strategic satisficing? A behavioral-agency theory perspective on stock repurchase program announcementsStrategic satisficing? A behavioral-agency theory perspective on stock repurchase program announcements
journals.aom.org [PDF]
The paper examines Chinese bank efficiency with a unique sample of 127 banks during the peak period of the global financial crisis. We apply an innovative Data Envelopment Analysis method under a stochastic environment. In the first stage, within the ambit of the …

Home bias in financial markets: robust satisficing with info gapsHome bias in financial markets: robust satisficing with info gaps
papers.ssrn.com [PDF]
The paper examines Chinese bank efficiency with a unique sample of 127 banks during the peak period of the global financial crisis. We apply an innovative Data Envelopment Analysis method under a stochastic environment. In the first stage, within the ambit of the …

Towards a" satisficing" theory of economic policyTowards a" satisficing" theory of economic policy
www.jstor.org [PDF]
The paper examines Chinese bank efficiency with a unique sample of 127 banks during the peak period of the global financial crisis. We apply an innovative Data Envelopment Analysis method under a stochastic environment. In the first stage, within the ambit of the …

Satisficing measures for analysis of risky positionsSatisficing measures for analysis of risky positions
pubsonline.informs.org [PDF]
The paper examines Chinese bank efficiency with a unique sample of 127 banks during the peak period of the global financial crisis. We apply an innovative Data Envelopment Analysis method under a stochastic environment. In the first stage, within the ambit of the …

Is satisficing absorbable? An experimental studyIs satisficing absorbable? An experimental study
www.tandfonline.com [PDF]
The paper examines Chinese bank efficiency with a unique sample of 127 banks during the peak period of the global financial crisis. We apply an innovative Data Envelopment Analysis method under a stochastic environment. In the first stage, within the ambit of the …



Q&A About Satisficing


What does satisficing mean?

A satisficing strategy sacrifices an optimal outcome in favor of a sufficient or satisfactory outcome.

How does this theory find application in sociology?

The theory of satisficing finds application in sociology when people make decisions about what they want from society based on their preferences and resources available to them.

What is satisficing?

Satisficing is a strategy that sacrifices an optimal outcome in favor of a sufficient or satisfactory outcome.

How does this theory find application in artificial intelligence?

The theory of satisficing finds application in artificial intelligence when machines are programmed to make decisions based on their programming and resources available to them.

Is "satisfice" a portmanteau?

No, "satisfice" is not a portmanteau. The word was coined by Herbert Simon in 1956 and it has nothing to do with the words "satisfy" or "suffice."

How does this theory find application in economics?

The theory of satisficing finds application in economics when people make decisions about which products to buy based on their preferences and resources available to them.

Why might someone use satisficing?

Someone may use satisficing because it saves time and energy.

How does one remember the sense of the word as a portmanteau of satisfy and either sacrifice or suffice?

To think of the word "satisfice" as a portmanteau can be useful when remembering its meaning, but it isn't actually correct. It was coined by Herbert Simon in 1956 and it has nothing to do with the words "satisfy" or "suffice."

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