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Satisficing: A 'Pretty Good' Heuristic


  • Bendor Jonathan Brodie

    () (Stanford University)

  • Kumar Sunil

    () (Stanford University)

  • Siegel David A

    () (Florida State University)


One of the best known ideas in the study of bounded rationality is Simon's satisficing; yet we still lack a standard formalization of the heuristic and its implications. We propose a mathematical model of satisficing which explicitly represents agents' aspirations and which explores both single-person and multi-player contexts. The model shows that satisficing has a signature performance-profile in both contexts: (1) it can induce optimal long-run behavior in one class of problems but not in the complementary class; and (2) in the latter, it generates behavior that is sensible but not optimal. The model also yields empirically testable predictions: in certain bandit-problems it pins down the limiting probabilities of each arm's use, and it provides an ordering of the arms' dynamical use-probabilities as well.

Suggested Citation

  • Bendor Jonathan Brodie & Kumar Sunil & Siegel David A, 2009. "Satisficing: A 'Pretty Good' Heuristic," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-38, March.
  • Handle: RePEc:bpj:bejtec:v:9:y:2009:i:1:n:9

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    Cited by:

    1. Polanski Arnold & Winter Eyal, 2010. "Endogenous Two-Sided Markets with Repeated Transactions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-27, March.
    2. Cui Zhiwei & Zhai Jian & Liu Xuan, 2009. "The Efficiency of Observability and Mutual Linkage," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-36, July.
    3. Arieli, Itai & Babichenko, Yakov, 2012. "Average testing and Pareto efficiency," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2376-2398.
    4. Michael Howlett & Ishani Mukherjee, 2014. "Policy Design and Non-Design: Towards a Spectrum of Policy Formulation Types," Politics and Governance, Cogitatio Press, vol. 2(2), pages 57-71.
    5. Wynn C. Stirling & Teppo Felin, 2016. "Satisficing, preferences, and social interaction: a new perspective," Theory and Decision, Springer, vol. 81(2), pages 279-308, August.
    6. repec:eee:jbrese:v:82:y:2018:i:c:p:127-140 is not listed on IDEAS

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