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Optimize, satisfice, or choose without deliberation? A simple minimax-regret assessment

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  • Charles F. Manski

    (Northwestern University)

Abstract

Simon (Q J Econ 69:99–118, 1955) introduced satisficing, but he did not provide a precise definition or analysis. Other researchers have subsequently interpreted satisficing in various ways, but a consensus perspective still has not emerged. This paper interprets satisficing as a class of decision strategies that a person might use when seeking to optimize in a setting where deliberation is costly. Costly deliberation lies at the heart of Simon’s motivation of satisficing, but he did not formalize the idea. I do so here, studying decision making as a problem of minimax-regret planning in which costly deliberation enables a person to reduce ambiguity. I report simple specific findings on how the magnitude of deliberation costs may affect choice of a decision strategy.

Suggested Citation

  • Charles F. Manski, 2017. "Optimize, satisfice, or choose without deliberation? A simple minimax-regret assessment," Theory and Decision, Springer, vol. 83(2), pages 155-173, August.
    • Handle: RePEc:kap:theord:v:83:y:2017:i:2:d:10.1007_s11238-017-9592-1
    DOI: 10.1007/s11238-017-9592-1
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    2. Yudistira Permana, 2020. "Explaining satisficing through risk aversion," Theory and Decision, Springer, vol. 89(4), pages 503-525, November.
    3. González-Valdés, Felipe & Ortúzar, Juan de Dios, 2018. "The Stochastic Satisficing model: A bounded rationality discrete choice model," Journal of choice modelling, Elsevier, vol. 27(C), pages 74-87.
    4. Daniela Cagno & Arianna Galliera & Werner Güth & Noemi Pace, 2018. "Behavioral patterns and reduction of sub-optimality: an experimental choice analysis," Theory and Decision, Springer, vol. 85(2), pages 151-177, August.
    5. Erlend Dancke Sandorf & Danny Campbell, 2019. "Accommodating satisficing behaviour in stated choice experiments," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(1), pages 133-162.
    6. John D. Hey & Yudistira Permana & Nuttaporn Rochanahastin, 2018. "When and how to satisfice: an experimental investigation," World Scientific Book Chapters, in: Experiments in Economics Decision Making and Markets, chapter 5, pages 121-137, World Scientific Publishing Co. Pte. Ltd..
    7. Ardalan, Kavous, 2018. "Neurofinance versus the efficient markets hypothesis," Global Finance Journal, Elsevier, vol. 35(C), pages 170-176.
    8. Gonzalez-Valdes, Felipe & Heydecker, Benjamin G. & Ortúzar, Juan de Dios, 2022. "Quantifying behavioural difference in latent class models to assess empirical identifiability: Analytical development and application to multiple heuristics," Journal of choice modelling, Elsevier, vol. 43(C).
    9. Mikołaj Czajkowski & Ewa Zawojska & Norman Meade & Ronaldo Seroa da Motta & Mike Welsh & Ramon Arigoni Ortiz, 2022. "On the inference about willingness to pay distribution using contingent valuation data," Working Papers 2022-08, Faculty of Economic Sciences, University of Warsaw.
    10. Daniela Di Cagno & Werner Güth & Noemi Pace, 2021. "Experimental evidence of behavioral improvement by learning and intermediate advice," Theory and Decision, Springer, vol. 91(2), pages 173-187, September.

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