Satisficing
Topic: Schools of Economic Thought and Economic Laws · NCERT: Beyond NCERT
Meaning
Satisficing means choosing an option that is "good enough" instead of searching for the best possible one. Herbert Simon (Nobel 1978) coined the idea as part of bounded rationality. Bounded rationality means people are rational only within the limits of their information, time and brainpower. Since a full search is too costly, people set a minimum standard and stop at the first option that meets it.
Example
A student looking for a rented room in Delhi takes the first one that is within budget and near the coaching centre. They do not visit every available room to find the best one.
Don't confuse with
- Optimising (maximising): the homo economicus assumption that a person, with full information, always picks the single best option.
Related concepts
- Behavioural economics
- Bounded rationality
- Heuristics
- Anchoring
- Availability heuristic
- Confirmation bias
- Overconfidence bias
- Prospect theory
- Loss aversion
- Endowment effect