Decision-makers satisfice under limits of attention and information.
Simon developed the underlying ideas in Administrative Behavior in 1947; the term itself first appeared in print in Models of Man in 1957, and March and Simon applied related ideas to organisations in Organizations in 1958. His point is that satisficing is rational given the cost of search rather than a departure from rationality. He received the 1978 Nobel for it.
In practice
- A family choosing a school visits three, likes the second, and stops, having spent exactly as long on it as the decision was worth.
- A buyer who stops at the first acceptable supplier has correctly priced their own time, and a buyer who evaluates forty has not.