What is satisficing in simple terms?

Choosing a restaurant without comparing them all, and walking into the first one that clears your bar of being nearby and decently reviewed. It is a strategy of picking what is good enough instead of the best.

Is satisficing irrational?

Not necessarily. Gathering and comparing information costs time and effort, so stopping at a good-enough option can be more rational overall. Simon described this as rationality under real-world constraints, that is, bounded rationality.

Satisficing

📈 Economics By CampusDown Wiki Editorial Team Last updated October 27, 2026

Satisficing is a decision strategy in which, instead of comparing all possible options to find the best, a person stops searching and chooses the first option that meets a preset standard of being good enough. A blend of satisfy and suffice, the term was coined in 1956 by the economist and cognitive scientist Herbert Simon. It is a core concept of bounded rationality, explaining how real people and organizations with limited information and computational capacity make decisions.

Contents

1. Simon's challenge
2. Development in organizations and economics
3. Extensions in psychology and survey research
4. FAQ
5. References

Simon's challenge

Simon (1955) criticized the traditional economic assumption that rational agents know all alternatives and outcomes and maximize utility, arguing that it does not match real cognitive capacities, and proposed a model of behavior operating within limits of information and computation. The following year, Simon (1956) first used the word satisficing, showing that organisms can meet their needs at a level sufficient for survival without weighing every option in their environment. A satisficer sets an aspiration level, examines options in turn and chooses the first that exceeds it, raising the aspiration level when good options are easy to find and lowering it when they are hard. Simon received the 1978 Nobel Memorial Prize in Economic Sciences for this work, and in his Nobel lecture (1978) stressed that satisficing is needed to explain actual decision-making in business organizations.

Development in organizations and economics

March and Simon (1958) argued that organizations seek satisfactory rather than optimal alternatives, analyzing habitual organizational behavior such as standard operating procedures. In A Behavioral Theory of the Firm, Cyert and March (1963) explained that firms act not by maximizing profit but by satisfying aspiration levels for multiple goals such as sales and market share. Winter (1971) asked whether market selection can make satisficing firms look like maximizers, and Conlisk (1996) argued that, given search and computation costs, bounded rationality belongs in economic models. In experiments, Caplin, Dean and Martin (2011) directly observed satisficing behavior, with people searching options sequentially and stopping once they found one above a threshold.

Extensions in psychology and survey research

Gigerenzer and Goldstein (1996) emphasized the ecological rationality of satisficing through research on fast and frugal heuristics, showing that simple rules can be as accurate as complex optimization. Schwartz and colleagues (2002) distinguished maximizers, who always seek the best, from satisficers, who settle for good enough, reporting that stronger maximizing tendencies were associated with more regret and lower happiness and satisfaction. Iyengar, Wells and Schwartz (2006) found that maximizing graduates landed jobs with higher salaries but were less satisfied with the outcome, a finding linked to research on choice overload. Krosnick (1991) proposed response satisficing, in which survey respondents pick the first plausible answer rather than answering optimally, greatly influencing survey methodology.

FAQ

What is satisficing in simple terms?: Choosing a restaurant without comparing them all, and walking into the first one that clears your bar of being nearby and decently reviewed. It is a strategy of picking what is good enough instead of the best.
Is satisficing irrational?: Not necessarily. Gathering and comparing information costs time and effort, so stopping at a good-enough option can be more rational overall. Simon described this as rationality under real-world constraints, that is, bounded rationality.

Sources reviewed: 2026-10-26

References

Simon, H. A. (1955). A behavioral model of rational choice. The Quarterly Journal of Economics, 69(1), 99–118.
Simon, H. A. (1956). Rational choice and the structure of the environment. Psychological Review, 63(2), 129–138.
March, J. G., & Simon, H. A. (1958). Organizations. New York: Wiley.
Cyert, R. M., & March, J. G. (1963). A Behavioral Theory of the Firm. Englewood Cliffs, NJ: Prentice-Hall.
Winter, S. G. (1971). Satisficing, selection, and the innovating remnant. The Quarterly Journal of Economics, 85(2), 237–261.
Simon, H. A. (1978). Rational decision-making in business organizations (Nobel Memorial Lecture). American Economic Review, 69(4), 493–513.
Krosnick, J. A. (1991). Response strategies for coping with the cognitive demands of attitude measures in surveys. Applied Cognitive Psychology, 5(3), 213–236.
Conlisk, J. (1996). Why bounded rationality? Journal of Economic Literature, 34(2), 669–700.
Gigerenzer, G., & Goldstein, D. G. (1996). Reasoning the fast and frugal way: Models of bounded rationality. Psychological Review, 103(4), 650–669.
Schwartz, B., Ward, A., Monterosso, J., Lyubomirsky, S., White, K., & Lehman, D. R. (2002). Maximizing versus satisficing: Happiness is a matter of choice. Journal of Personality and Social Psychology, 83(5), 1178–1197.
Iyengar, S. S., Wells, R. E., & Schwartz, B. (2006). Doing better but feeling worse: Looking for the 'best' job undermines satisfaction. Psychological Science, 17(2), 143–150.
Caplin, A., Dean, M., & Martin, D. (2011). Search and satisficing. American Economic Review, 101(7), 2899–2922.

Reports and materials that use this theory (Korean)

There are no materials dedicated to this theory yet, but you can search related reports in the CampusDown library (Korean).

Find more reports · Search '만족화' on CampusDown →

Bounded RationalityWhat bounded rationality is, Simon's satisficing and administrative behavior, the behavioral theory of the firm and transaction costs, Kahneman and Tversky's heuristics and biases, Gigerenzer's ecological rationality and rational inattention.🧠 Psychology Choice OverloadWhat choice overload is: too many options leading people to defer or give up on choosing and to feel less satisfied. Covers the jam study, retirement fund research, Schwartz's paradox of choice and maximizers, a null meta-analysis and one identifying moderators.🧠 Psychology NudgeWhat is a nudge? Thaler and Sunstein’s choice architecture, how default settings boosted 401(k) enrollment and organ-donor consent, examples from public policy, the difference between nudges, sludge and dark patterns, and key criticisms.📈 Economics Representativeness heuristicKahneman and Tversky's representativeness heuristic—judging probability by resemblance—illustrated by the Linda problem and conjunction fallacy, base-rate neglect, the gambler's fallacy, stereotyping, and how Bayesian thinking corrects it.🧠 Psychology Status quo biasSamuelson and Zeckhauser's status quo bias, how defaults shape organ donation and 401(k) enrollment, why we stick with what we have (loss aversion, regret avoidance), and how nudges use it for good.🧠 Psychology

Latest ArticlesView all ›

New guides for college study and assignments (Korean)

This article was last updated on October 27, 2026. It is based on widely recognized original works and textbooks; when citing it in a paper, please check the original sources listed in the references.