Tuesday, October 07, 2014

Maximize vs. Satisfice: How Do You Decide?

What type of decision-maker are you? Do you examine all the options exhaustively, hoping to find the absolutely best alternative?  Do you carefully compare the pros and cons of a wide range of options before making a decision?  Or, do you search until you find an option that is satisfactory, and then choose that one even if it is not perfect or completely optimal?    Nobel winner Herbert Simon described these two patterns of decision-making decades ago.  He called them "maximizing" vs. "satisficing" behaviors.  

In today's Wall Street Journal, Elizabeth Bernstein examines these two strategies.  She describes the research of Swarthmore Professor Barry Schwartz.  Here's an excerpt:

In a study published in 2006 in the journal Psychological Science, Dr. Schwartz and colleagues followed 548 job-seeking college seniors at 11 schools from October through their graduation in June.  Across the board, they found that the maximizers landed better jobs. Their starting salaries were, on average, 20% higher than those of the satisficers, but they felt worse about their jobs.

Bernstein describes how maximizers often find themselves less content than satisficers.  Why might that be?  The exhaustive search and comparison of many alternatives often opens the door for feelings of regret once a decision has been made.  Did I make the right call?  Should I have chosen another option?  Did I consider the right variables and attributes?   Satisficers may not experience those feelings to the same extent.  Does this mean that we should not examine options carefully? I don't think so, but it does mean that we have to watch out for feelings of discontent in the immediate aftermath of a tough decision.  Moreover, we have to be cognizant of the fact that we might be on a team with people how tend to have the opposite decision-making pattern.  

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