Saturday, October 22, 2011
In economic theory, the is an assumption that customers and consumers decide on products that satisfy their demand. This has simplified customer behavior sufficiently for microeconomics theory to create mathematical models. For the past 40 or more years, I have had problems with this assumption. Recently, I started rereading Keeney and Raiffa's, "Decisions with Multiple Objectives: Preferences and Value Tradeoffs", Wiley, 1976, to find a definition of it, (even though the authors had not defined it as such). On page 74, "...a continuing interaction between analyzing what is achevable and what is desirable...[where the decision maker]...must constantly weigh...what he would like to get and what he thinks he might be able to get." Satisficing behavior is this tradeoff between requirements and resources, policies, and standards.