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

Charles Manski*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

8 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)155-173
Number of pages19
JournalTheory and Decision
Volume83
Issue number2
DOIs
StatePublished - Aug 1 2017

Keywords

  • Bounded rationality
  • Costly deliberation
  • Decision under ambiguity
  • Minimax regret
  • Satisficing

ASJC Scopus subject areas

  • Decision Sciences(all)
  • Developmental and Educational Psychology
  • Arts and Humanities (miscellaneous)
  • Applied Psychology
  • Social Sciences(all)
  • Economics, Econometrics and Finance(all)
  • Computer Science Applications

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