To 'satisfice' means "To decide on and pursue a course of action that will satisfy the minimum requirements necessary to achieve a particular goal." (Oxford English Dictionary). Herbert Simon (1978 Nobel Prize in Economics) was the first to use the term in this technical sense, which is an old alteration of the ordinary English word "satisfy". Simon wrote (Psychological Review, 63(2), 129-138 (1956)) "Evidently, organisms adapt well enough to 'satisfice'; they do not, in general, 'optimize'." Agents satisfice, according to Simon, due to limitation of their information, understanding, and cognitive or computational ability. These limitations, which Simon called "bounded rationality", force agents to look for solutions which are good enough, though not necessarily optimal. The optimum may exist but it cannot be known by the resource- and information-limited agent.
There is a deep psychological motivation for satisficing, as Barry Schwartz discusses in Paradox of Choice: Why More Is Less. "When people have no choice, life is almost unbearable." But as the number and variety of choices grows, the challenge of deciding "no longer liberates, but debilitates. It might even be said to tyrannize." (p.2) "It is maximizers who suffer most in a culture that provides too many choices" (p.225) because their expectations cannot be met, they regret missed opportunities, worry about social comparison, and so on. Maximizers may acquire or achieve more than satisficers, but satisficers will tend to be happier.
Psychology is not the only realm in which satisficing finds its roots. Satisficing - as a decision strategy - has systemic or structural advantages that suggest its prevalence even in situations where the complexity of the human psyche is irrelevant. We will discuss an example from the behavior of animals.
Several years ago an ecological colleague of mine at the Technion, Prof. Yohay Carmel, posed the following question: Why do foraging animals move from one feeding site to another later than would seem to be suggested by strategies aimed at maximizing caloric intake? Of course, animals have many goals in addition to foraging. They must keep warm (or cool), evade predators, rest, reproduce, and so on. Many mathematical models of foraging by animals attempt to predict "patch residence times" (PRTs): how long the animal stays at one feeding patch before moving to the next one. A common conclusion is that patch residence times are under-predicted when the model assumes that the animal tries to maximize caloric intake. Models do exist which "patch up" the PRT paradox, but the quandary still exists.
Yohay and I wrote a paper in which we explored a satisficing - rather than maximizing - model for patch residence time. Here's the idea. The animal needs a critical amount of energy to survive until the next foraging session. More food might be nice, but it's not necessary for survival. The animal's foraging strategy must maximize the confidence in achieving the critical caloric intake. So maximization is taking place, but not maximization of the substantive "good" (calories) but rather maximization of the confidence (or reliability, or likelihood, but these are more technical terms) of meeting the survival requirement. We developed a very simple foraging model based on info-gap theory. The model predicts that PRTs for a large number of species - including invertebrates, birds and mammals - tended to be longer (and thus more realistic) than predicted by energy-maximizing models.
This conclusion - that satisficing predicts observed foraging times better than maximizing - is tentative and preliminary (like most scientific conclusions). Nonetheless, it seems to hold a grain of truth, and it suggests an interesting idea. Consider the following syllogism.
1. Evolution selects those traits that enhance the chance of survival.
2. Animals seem to have evolved strategies for foraging which satisfice (rather than maximize) the energy intake.
3. Hence satisficing seems to be competitively advantageous. Satisficing seems to be a better bet than maximizing.
Unlike my psychologist colleague Barry Schwartz, we are not talking about happiness or emotional satisfaction. We're talking about survival of dung flies or blue jays. It seems that aiming to do good enough, but not necessarily the best possible, is the way the world is made.
And this brings me to the suggestion that (even) God is a satisficer. The word "good" appears quite early in the Bible: in the 4th verse of the 1st chapter of Genesis, the very first book: "And God saw the light [that had just been created] that it was good...". At this point, when the world is just emerging out of tohu v'vohu (chaos), we should probably understand the word "good" as a binary category, as distinct from "bad" or "chaos". The meaning of "good" is subsequently refined through examples in the coming verses. God creates dry land and oceans and sees that it is good (1:10). Grass and fruit trees are seen to be good (1:12). The sun and moon are good (1:16-18). Swarming sea creatures, birds, and beasts are good (1:20-21, 25).
And now comes a real innovation. God reviews the entire creation and sees that it is very good (1:31). It turns out that goodness comes in degrees; it's not simply binary: good or bad. "Good" requires judgment; ethics is born. But what particularly interests me here is that God's handiwork isn't excellent. Shouldn't we expect the very best? I'll leave this question to the theologians, but it seems to me that God is a satisficer.
The animal foraging results are pretty intriguing. Would it be too much of a stretch to apply this to people as individuals and economics more generally, I wonder. Many people are loosely satisficing in their financial desires. They want to live comfortably, but do not choose a career, for example, solely on the basis of how much money it will bring in. If it brings in enough...then there are other considerations that become of greater importance.
ReplyDeleteOn the other hand, business entities, so intrinsic to the workings of modern world affairs, are more interested in maximizing profits. Sometimes, of course, businesses get set in their ways and seem to move into a more satisficing mode. However, economic competition, the basis for the economies of modern nations, enforces Adam Smith's "hidden hand" which guides with a maximizing, not satisficing, strategy.
This suggests that modern civilization has an intrinsic difference compared to other biological systems, one characterized by maximizing rather than satisficing. This dimension to Smith's "hidden hand" might not have been considered before, but has some interesting implications regarding ability of humankind to handle global issues like long-term planning, existential risks, resource depletion, and no doubt others.
Thanks for your comments Dan.
ReplyDeleteYou are correct that the animal foraging results can be applied to both micro and macro economics. Indeed they have been. The basic logic is the same. A critical outcome - for instance adequate income or profit - is necessary. A sub-optimal strategy may be most robust to uncertainty in guaranteeing the critical outcome. This sub-optimal strategy will tend to prevail.
One micro-economic example of this is the info-gap robustness explanation of the equity premium puzzle in finance (See "Info-Gap Decision Theory" on the Books link of info-gap.com). Macro-economic examples can be found in "Info-Gap Economics" (see "Books" on info-gap.com).
Regarding your comments about Adam Smith and business entities, I tend to not agree. Business survival does not require the greatest possible profit. It requires enough profit to continue doing business. This is precisely the same as the caloric needs of animals. Economic competition, like biological competition, is survival of the more fit over the less fit. One does not need to be maximally fit in order to survive. In fact, sub-optimal fitness can be more robust to surprise, and thus of greater survival value in a tumultuous environment.
Finally, I agree with you that there are tremendous differences between modern civilization and biological systems. However, the structure of survival in competition over scarce resources is not one of the differences. What this implies about the ability of humankind to handle long-term risks is quite an open question. The market for these risks is clearly incomplete. The issues, as you note, are global so no single nation can handle them alone. Since the uncertainties are enormous, strategies much be robust to surprise. A basic theorem in info-gap theory shows that large robustness is attainable only for satisficed - rather than maximal - goals. After all, even God is a satisficer. :)
If it is allowed to introduce ancient history in this contemporary topic, the Roman Empire maintained itself with a relatively small armed force: say 350.000 soldiers for an area from modern Scotland to Jordan and Marocco to Armenia. I have argued years ago that the level of security was much lower than one would expect of a functioning Empire today. There was no regular police. The frontiers were quite permeable and small-scale raids, banditry and unrest were frequent. What the army did is maintain sufficient control, most of the time, to maintain political stability and guarantee the levying of taxes. The services provided by the state were minimal (no postal service for the citizens). So it might be argued that Roman Emperors were satisficers (they were gods too, but only after their deaths).
ReplyDeleteThat animals do not maximize their energy intake may be explained by their focusing more on the more important business of evolution: Sex.
ReplyDeleteAnd it was already the Greeks who understood that that is the main pre-occupation of the gods.
A key assumption of the optimal PRT theory is that more food = more offspring, so sex, in a very simplistic way.
ReplyDeleteAnother interesting ecological example arises when herbivores have a range of plants to eat that differ in the ratios of protein and carbohydrate. How should they modify their diet intake so as to ensure they get enough of each without too much of the other? Lots of data on this - little theory.
(Even) God is a Satisficer is an interesting post,
ReplyDeleteI am amazed by this post how could you say God is a satisficer. I am unable to this word to God. God is not a satisficer, God is always in our mind and always wishes to help us if we want.
Thanks for the invite to read you blog, this one about God caught my eye. It seem, from my reading of evolution, that the creation (the world around us, life etc) is governed by multi-objective constraint optimisation or satisficing (if i understand you correctly.) However, It also seems to me that God being omniscient (by axiom - for Jews, Christians etc) must not be subject to uncertainty in his own thoughts! So presumably must not need to implement a info-gap like strategy for managing risk and uncertainty - sorry to say Yakov, God knows about info-gap like strategies but perhaps he knows a few other things as well - nice blog though
ReplyDeleteI am beginning to suspect that possibly, maximizing is not as much an alternative to satisficing, but an extension or further-driven, narrower choice, that can only be made when circumstances get more certain or predictable. In social psychology, there is a phenomenon called 'risky shift', when people start to think differently, more extreme, due to discussing it. Meertens (1980, 2004) has highlighted this as group-polarization, effective in for example terrorist sleeper-cells. In our terms, satisficing is not enough when group members start to compete over group leadership, using up their options to keep an open mind and become more orthodox in the group's ideology. So satisficing seems one strategy preparing the way for another one, maximizing, when the time is ripe and certainty overcomes uncertainty robustness. A waiting game?
ReplyDeleteRon - thanks for your comment. I agree with you that "maximizing is not ... an alternative to satisficing, but an extension or ... narrower choice, that can only be made when circumstances get more certain or predictable." There are two points here, which I will explain.
ReplyDelete1. Maximizing is a special case of satisficing. The decision strategy of satisficing aims for an adequate (though not necessarily maximal) level of outcome. One can choose this adequate level to be as modest or as ambitious as one wishes. When one chooses the adequate level as the best that is predicted to be possible, then one is maximizing. From this perspective, maximizing is a special case of satisficing, as you wrote. This comes out very clearly in the info-gap analysis of robustness, where maximizing shows up as an endpoint of the info-gap robustness curve (see sources in info-gap.com).
2. Maximize when things are certain. A basic theorem in info-gap theory asserts that predicted maxima have no robustness to uncertainty. One needs robustness when things are uncertain, so one cannot confidently maximize. Conversely, when things are certain, one can (and perhaps should) maximize. Again, this is just as you wrote.