Downloadable - About University

20 How people make decisions involving multiple objectives
Sequential decision making: satisficing
The strategies we have outlined so far are theories intended to describe
how people make a decision when they are faced with a simultaneous
choice between alternatives. Thus, all the cars, in the earlier example,
were available at the same time. In some situations, however, alternatives
become available sequentially. For example, if you are looking for a new
house you might, over a period of weeks, successively view houses as
they become available on the market. Herbert Simon, 7 has argued that, in
these circumstances, decision makers use an approach called satisficing.
The key aspect of satisficing is the aspiration level of the decision maker
which characterizes whether a choice alternative is acceptable or not.
Imagine that your aspiration level is a job in a particular geographical
location with salary above a particular level and at least three weeks’
paid holiday per year. Simon argues that you will search for jobs until
you find one that meets your aspiration levels on all these attributes.
Once you have found such a job you will take it and, at least for the time
being, conclude your job search.
Consider also the decision problem of selling your home. Offers for
purchase are received sequentially and remain active for only a limited
period of time. If you do not accept an offer within a short period
of it being made then the prospective purchaser may follow up other
possibilities. Reconsider also purchasing a used car. Cars are on show in
many different showrooms scattered across town, and advertisements
for private sales appear in the local newspaper every night. Should you
look at each car?
How would you solve these decision problems? Simon 7 would argue
that in the house sale example you would wait until you received a
‘satisfactory’ offer. Similarly, in the car purchase example, you would
continue looking until you find a car that is ‘satisfactory’ to you. To quote,
‘in a satisficing model, search terminates when the best offer exceeds an
aspiration level that itself adjusts gradually to the value of the offers so
far received ... the important thing about search and satisficing theory
is that it shows how choice could actually be made with reasonable
amounts of calculation, and using very incomplete information’.
In the job search problem, if you are offered, and accept, a ‘satisfactory’
jobitisstillpossiblethatyoumight have found a better job if you
had been willing to make further job applications and go for further
interviews. It is also possible that when you started the job search
process your expectations were unreasonably high such that you might,
at an early stage, delay accepting, or refuse, what objectively might
be an excellent job. A subsequent unsuccessful job search may lower