Skip to main content
Log in

Satisficing, preferences, and social interaction: a new perspective

  • Published:
Theory and Decision Aims and scope Submit manuscript

Abstract

Satisficing is a central concept in both individual and social multiagent decision making. In this paper we first extend the notion of satisficing by formally modeling the tradeoff between costs (the need to conserve resources) and decision failure. Second, we extend this notion of “neo”-satisficing into the context of social or multiagent decision making and interaction, and model the social conditioning of preferences in a satisficing framework.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4

Similar content being viewed by others

Notes

  1. For an in-depth review of Stirling (2012), see Ross (2014).

  2. “There are two ways of looking at our duty in the matter of opinion ... We must know the truth, and we must avoid error—these are our first and great commandments as would-be knowers; but they are not two ways of stating an identical commandment, they are two separable laws. ... We may regard the chase for truth as paramount, and the avoidance of error as secondary; or we may, on the other hand, treat the avoidance of error as more imperative, and let truth take its chance” (James 1956, pp. 17,18). Landau and Chisholm (1995) argue that this perspective is also relevant to organizational management: “The difference is not simply semantic, it is that which distinguishes a success-oriented form a failure-avoidance management [emphasis in original].”

  3. Levi’s use of the idea of “probability” here is in the sense of a propensity; that is, the tendency or disposition to yield an outcome of a certain kind.

  4. The importance of interest relative to truth is emphasized by both Whitehead and Popper. “It is more important that a proposition be interesting than that it be true. This statement is almost a tautology. For the energy of operation of a proposition in an occasion of experience is its interest, and is its importance” (Whitehead 1937, PartIV,ChapterXVI). “We must also stress that truth is not the only aim of science. We want more than truth: what we look for is interesting truth [emphasis in original]” (Popper 1963, p. 229).

  5. In the epistemological domain, the probabilistic analogue to this concept is that Prob(B) quantifies the degree to which focusing on B avoids error.

  6. The use of the probability syntax for utilities is not new. Berhold (1973) and Castagnoli and LiCalzi (1996) have interpreted normalized utility functions as probability mass functions, and Abbas and Howard (2005) and Abbas (2009) have applied the probability syntax to utilities for the study of multi-attribute decision problems.

  7. Necessity (the original theorem) was independently established by de Finetti (1937) and Ramsey (1978), and sufficiency (the converse theorem) was independently established by Kemeny (1955) and Lehman (1955).

  8. “Complexity is no argument against a theoretical approach if the complexity arises not out of the theory itself but out of the material which any theory ought to handle” (Palmer 1971, p. 184).

References

  • Abbas, A.E. (2009). From bayes’ nets to utility nets. In: Proceedings of the 29th international workshop on bayesian inference and maximum entropy methods in science and engineering (pp 3–12)

  • Abbas, A. E., & Howard, R. A. (2005). Attribute dominance utility. Decision Analysis, 2(4), 185–206.

    Article  Google Scholar 

  • Arrow, K. J. (1986). Rationality of self and others in an economic system. In R. M. Hogarth & M. W. Reder (Eds.), Rational choice. Chicago: University of Chicago Press.

    Google Scholar 

  • Bacharach, M. (1999). Interactive team reasoning: A contribution to the theory of cooperation. Research in Economics, 23, 117–147.

    Article  Google Scholar 

  • Bacharach, M. (2006). Beyond individual choice: Teams and frames in game theory. Princeton: Princeton University Press.

    Google Scholar 

  • Battigalli, P., & Dufwenberg, M. (2009). Dynamic psychological games. Journal of Economic Theory, 144, 1–35.

    Article  Google Scholar 

  • Bendor, J. B., Kumar, S., & Siegel, D. A. (2009). Satisficing: A ‘pretty good’ heuristic. The B E Journal of Theoretical Economics, 9(1), 1–36.

    Article  Google Scholar 

  • Berhold, M. H. (1973). The use of distribution functions to represent utility functions. Management Science, 23, 825–829.

    Article  Google Scholar 

  • Bhatia, S. (2013). Associations and the accumulation of preference. Psychological review, 120(3), 512.

    Article  Google Scholar 

  • Bolton, G. E., & Ockenfels, A. (2005). A stress test of fairness measures in models of social utility. Economic Theory, 24(4), 957–982.

    Google Scholar 

  • Busemyer, J. R., & Towsend, J. T. (1993). Decision field theory: A dynamic-cognitive approach to decision making in an uncertain environment. Psychological Review, 100(3), 432.

    Article  Google Scholar 

  • Camerer, C. (2003). Behavioral game theory: Experiments in strategic interaction. Princeton: Princeton Univ. Press.

    Google Scholar 

  • Camerer, C., Lowenstein, G., & Rabin, M. (Eds.). (2004a). Advances in behavorial economics. Princeton: Princeton Univ. Press.

  • Camerer, C., et al. (2004b). Foundations of human sociality: Economic experiments and ethnographic evidence from fifteen small-scale societies. Oxford: Oxford University Press.

    Google Scholar 

  • Castagnoli, E., & LiCalzi, M. (1996). Expected utility without utility. Theory and Decision, 41, 281–301.

    Article  Google Scholar 

  • Colman, A. M. (2003). Cooperation, psychological game theory, and limitations of rationality in social interaction. Behavioral and Brain Sciences, 26, 139–198.

    Google Scholar 

  • Cowell, R. G., Dawid, A. P., Lauritzen, S. L., & Spiegelhalter, D. J. (1999). Probabilistic networks and expert systems. New York: Springer.

    Google Scholar 

  • Cozman, F. G. (2000). Credal networks. Artificial Intelligence, 120, 199–233.

    Article  Google Scholar 

  • de Finetti, B. (1937). La prévision: ses lois logiques, ses sources subjectives. Annales de l’Institut Henri Poincaré 7:1–68 (translated as ‘Forsight. Its Logical Laws, Its Subjective Sources’, in Studies in Subjective Probability, H. E. Kyburg Jr. and H. E. Smokler (eds.), Wiley, New York, NY, 1964, pages 93–158).

  • Dufwenberg, M., & Kirchsteiger, G. (2004). A theory of sequential reciprocity. Games and Economic Behavior, 47, 268–298.

    Article  Google Scholar 

  • Dyer, J. S., & Sarin, R. K. (1979). Measurable multiattribute value functions. Operations Research, 27, 810–822.

    Article  Google Scholar 

  • Elster, J. (Ed.), (1985). The multiple self. Cambridge: Cambridge University Press.

  • Fehr, E., & Schmidt, K. (1999). A theory of fairness, competition, and cooperation. Quarterly Journal of Economics, 114, 817–868.

    Article  Google Scholar 

  • Fishburn, P. C. (1973). The theory of social choice. Princeton: Princeton University Press.

    Google Scholar 

  • Geanakoplos, J., Pearce, D., & Stacchetti, E. (1989). Psychological games and sequential rationality. Games and Economic Behavior, 1, 60–79.

    Article  Google Scholar 

  • Gilbert, M. (2008). Social convention revisited. Topoi, 27, 5–16.

    Article  Google Scholar 

  • Gilboa, I., & Schmeidler, D. (1988). Information dependent games. Economics Letters, 27, 215–221.

    Article  Google Scholar 

  • Hansson, B. (1972). The independence condition on the theory of social choice, working paper no. 2, The Mattias Fremling Society, Department of Philosophy, Lund.

  • Harsanyi, J. (1955). Cardinal welfare, individualistic ethics, and interpersonal comparisons of utility. Journal of Political Economy, 63, 315.

    Article  Google Scholar 

  • Henrich, J., et al. (2005). “Economic Man” in cross-culturative perspective: Behavorial experiments in 15 small-scale societies. Behavioral and Brain Sciences, 28(6), 795–855.

    Google Scholar 

  • Hicks, J. R. (1939). Foundations of welfare economics. Economic Journal, 49(196), 696–712.

    Article  Google Scholar 

  • Hollis, M. (1998). Trust within reason. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • James, W. (1956). The will to believe and other essays. New York: Dover.

    Google Scholar 

  • Jensen, F. V. (2001). Bayesian networks and decision graphs. New York: Springer.

    Book  Google Scholar 

  • Kaldor, N. (1939). Welfare propositions of economic and interpersonal comparisons of utility. Economic Journal, 49(195), 549–552.

    Article  Google Scholar 

  • Keeney, R. L., & Raiffa, H. (1976). Decisions with multiple objectives. Cambridge: Cambridge University Press.

    Google Scholar 

  • Kemeny, J. (1955). Fair bets and inductive probabilities. Journal of Symbolic Logic, 20(1), 251–262.

    Article  Google Scholar 

  • Lam, S. W., Ng, T. S., Sim, M., & Song, J. H. (2013). Multiple objective satisficing under uncertainty. Operations Research, 61, 214–217.

    Article  Google Scholar 

  • Landau, M., & Chisholm, D. (1995). The arrogance of optimism: Notes on failure-avoidance management. Journal of Contingencies and Crisis Management, 3, 67–80.

    Article  Google Scholar 

  • Lehman, R. S. (1955). On conformation and rational betting. Journal of Symbolic Logic, 20(1), 263–273.

    Google Scholar 

  • Levi, I. (1980). The Enterprise of Knowledge. Cambridge: MIT Press.

    Google Scholar 

  • Margolis, H. (1990). Dual utilities and rational choice. In J. Mansbridge (Ed.), Beyond self-interest, chap 15 (pp. 239–253). Chicago Il: University of Chicago Press.

    Google Scholar 

  • Murray, J.A.H., Bradley, H., Craigie, W.A., & Onions, C.T. (Eds.). (1991). The compact oxford english dictionary. Oxford: The Oxford Univ. Press.

  • Nash, J. F. (1950). The bargaining problem. Econometrica, 18, 155–162.

    Article  Google Scholar 

  • Nash, J. F. (1951). Non-cooperataive games. Annals of Mathematics, 54, 289–295.

    Article  Google Scholar 

  • von Neumann, J., & Morgenstern, O. (1944). The theory of games and economic behavior. Princeton: Princeton University Press. (2nd ed., 1947).

    Google Scholar 

  • Palmer, F. R. (1971). Grammar. Harmondsworth: Penguin.

    Google Scholar 

  • Pazgal, A. (1997). Satisficing leads to cooperation in mutual interests games. International Journal of Game Theory, 26(4), 439–453.

    Article  Google Scholar 

  • Pearl, J. (1988). Probabilistic reasoning in intelligent systems. San Mateo: Morgan Kaufmann.

    Google Scholar 

  • Popper, K. R. (1963). Conjectures and refutations: The growth of scientific knowledge. New York: Harper & Row.

    Google Scholar 

  • Ramsey, F. P. (1978). Truth and probability. In D. H. Mellor (Ed.), Foundations: Essays in philosophy, logic, mathematics, and economics (pp. 58–100). Atlantic Highlands: The Humanities Press.

    Google Scholar 

  • Rawls, J. (1971). A theory of justice. Cambridge: Harvard University Press.

    Google Scholar 

  • Ross, D. (2014). Theory of conditional games. Journal of Economic Methodology, 21, 193–198.

    Article  Google Scholar 

  • Scitovsky, T. (1941). A note on welfare propositions in economics. Review of Economic Studies, 9(1), 77–88.

    Article  Google Scholar 

  • Sen, A. K. (1990). Rational fools: A critique of the behavorial foundations ofeconomic theory. In J. J. Mansbridge (Ed.), Beyond self-interest, chap 2 (pp. 25–43). Chicago, Il: University ofChicago Press.

    Google Scholar 

  • Shubik, M. (1982). Game theory in the social sciences. Cambridge: MIT Press.

    Google Scholar 

  • Simon, H. A. (1955). A behavioral model of rational choice. Quarterly Journal of Economics, 59, 99–118.

    Article  Google Scholar 

  • Simon, H.A. (1982). The role of expectations in an adaptive or behavioristic model. In: Models of Bounded Rationality, vol 2 (pp 380–399). Cambridge: MIT Press.

  • Steedman, I., & Krause, U. (1985). Goethe’s Faust, arrow’s possibility theorem and the individual decision maker. In J. Elster (Ed.), The multiple self, chap 8 (pp. 197–231). Cambridge: Cambridge University Press.

    Google Scholar 

  • Stirling, W. (2012). Theory of conditional games. Cambridge: Cambridge University Press.

    Google Scholar 

  • Stirling, W. C. (2003). Satisficing games and decision making: With applications to engineering and computer science. Cambridge: Cambridge University Press.

    Book  Google Scholar 

  • Stirling, W. C., & Felin, T. (2013). Game theory, conditional preferences, and socialinfluence. PLoS One, 8(2), e56,751. doi:10.1371/journal.pone.0056,751.

    Article  Google Scholar 

  • Sugden, R. (1993). Thinking as a team: Towards an explanation of nonselfish behavior. Social Philosophy and Policy, 10, 69–89.

    Article  Google Scholar 

  • Sugden, R. (2000). Team preferences. Economics and Philosophy, 16, 175–204.

    Article  Google Scholar 

  • Sugden, R. (2003). The logic of team reasoning. Philosophical Explorations, 6, 165–181.

    Article  Google Scholar 

  • Unger, P. (1975). Ignorance: a case for skepticism. Oxford: Oxford University Press.

    Google Scholar 

  • Whitehead, A. N. (1937). Adventures in ideas. London: Macmillan.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Wynn C. Stirling.

Appendix: Proof of the isomorphism lemma

Appendix: Proof of the isomorphism lemma

Lemma 2

Subjugation is isomorphic to sure loss.

Proof

To establish this result we first prove that the categorical and conditional utilities are order isomorphic to marginal and conditional probability mass functions. Without loss of generality, let us restrict attention to a two-agent collective \(\{Z_1,Z_2\}\), with \(Z_1\) possessing a categorical utility \(u_{{\scriptscriptstyle Z_1}} \text{: }\ {{\mathcal {A}}}_1\times {{\mathcal {A}}}_2 \rightarrow [0,1]\) and \(Z_2\) possessing a family of conditional utilities \(\{u_{{\scriptscriptstyle Z_2}|{\scriptscriptstyle Z_1}}(\cdot | z_1, z_2) \text{: }\ \rightarrow [0,1]\ \forall \ (z_1, z_2) \in {{\mathcal {A}}}_1 \times {{\mathcal {A}}}_2\}\). To proceed, let \(\varOmega _1\) and \(\varOmega _2\) be arbitrary probability sample spaces of distinct elements and cardinality equal to the cardinality of \({{\mathcal {A}}}_1\) and \({{\mathcal {A}}}_2\), respectively, and let \(\{Y_1, Y_2\}\) be discrete bijective function (random variables in statistical parlance) defined over \(\varOmega _1 \times \varOmega _2\) such that \(Y_1\) possesses a probability mass function \(p_{{\scriptscriptstyle Y_1}}\) over \(\varOmega _1\times \varOmega _2\) and \(Y_2\) possesses a family of conditional probability mass functions \(\{ p_{{\scriptscriptstyle Y_2}|{\scriptscriptstyle Y_1}}(\cdot | \omega _1, \omega _2) \text{: }\ \varOmega _1 \times \varOmega _2 \rightarrow [0,1] \ \forall (\omega _1, \omega _2) \in \varOmega _1 \times \varOmega _2 \}\). Now let \(g \text{: }\ {{\mathcal {A}}}_1\times {{\mathcal {A}}}_2 \rightarrow \varOmega _1\times \varOmega _2\) be a bijective mapping of the form \(g(z_1,z_2) = (\omega _1,\omega _2) \in \varOmega _1 \times \varOmega _2\). Define g such that

$$\begin{aligned} u_{{\scriptscriptstyle Z_1}}(z_1, z_2) =p_{{\scriptscriptstyle Y_1}} [g(z_1,z_2)] = p_{{\scriptscriptstyle Y_1}} [\omega _1,\omega _2] \end{aligned}$$

for all \((z_1,z_2) \in {{\mathcal {A}}}_1\times {{\mathcal {A}}}_2\), and

$$\begin{aligned} u_{{\scriptscriptstyle Z_2}|{\scriptscriptstyle Z_1}}(z_1,z_2|z_1^\prime , z_2^\prime ) = p_{{\scriptscriptstyle Y_2}|{\scriptscriptstyle Y_1}}[g(z_1,z_2) | g(z_1^\prime ,z_2^\prime )] = p_{{\scriptscriptstyle Y_2}|{\scriptscriptstyle Y_1}}[\omega _1,\omega _2| \omega _1^\prime ,\omega _2^\prime )] \end{aligned}$$

for all \((z_1^\prime , z_2^\prime ) \in {{\mathcal {A}}}_1\times {{\mathcal {A}}}_2\). It is immediate that this mapping establishes the structural equivalence of the benefit criterion regarding \({{\mathcal {A}}}_1\times {{\mathcal {A}}}_2\) and the belief criterion regarding \(\varOmega _1 \times \varOmega _2\). It remains to confirm that \(Z_2\) computing its utility of \((z_1,z_2)\) given that \(Z_1\) conjectures \((z_1^\prime , z_2^\prime )\) is equivalent to \(Y_2\) computing its belief that \(g(z_1,z_2)\) is realized given that \(Y_1\) asserts that \(g(z_1,z_2)\) is realized. To establish this equivalence, we simply observe that the conjecture by \(Z_1\) and the realization assertion by \(Y_1\) are both antecedents of hypothetical propositions whose consequents are \(u_{{\scriptscriptstyle Z_2}|{\scriptscriptstyle Z_1}}(z_1, z_2|z_1^\prime ,z_2^\prime )\) and \(p_{{\scriptscriptstyle Y_2}|{\scriptscriptstyle Y_1}}[g(z_1,z_2) | g(z_1^\prime ,z_2^\prime )]\), respectively. This establishes the order isomorphism.

To establish the isomorphism between subjugation and sure loss, let \(\{Y_1, Y_2\}\) be a collective of discrete random variables, each defined over the product sample space \({\varvec{\varOmega }}= \varOmega _1 \times \varOmega _2\). Let \(p_{{\scriptscriptstyle Y_i}} \text{: }\ {\varvec{\varOmega }}\rightarrow \mathbb {R}\) be a belief function (not necessarily a probability) such that \(p_{{\scriptscriptstyle Y_i}} ({\varvec{\omega }}) \ge p_{{\scriptscriptstyle Y_i}} ({\varvec{\omega }}^\prime )\) means that the belief that \({\varvec{\omega }}\) will be realized is at least as great as the belief that \({\varvec{\omega }}^\prime \) will be realized. Also, let \(p_{{\scriptscriptstyle Y_1}{\scriptscriptstyle Y_2}} \text{: }\ {\varvec{\varOmega }}^2 \rightarrow \mathbb {R}\) be a belief function such that \(p_{{\scriptscriptstyle Y_1}{\scriptscriptstyle Y_2}}({\varvec{\omega }}_1, {\varvec{\omega }}_2) \ge p_{{\scriptscriptstyle Y_1}{\scriptscriptstyle Y_2}}({\varvec{\omega }}_1^\prime ,{\varvec{\omega }}_2^\prime )\) means that the belief that \(({\varvec{\omega }}_1, {\varvec{\omega }}_2)\) is realized is at least as great as the belief that \(({\varvec{\omega }}_1^\prime , {\varvec{\omega }}_2^\prime )\) is realized.

Suppose there exists \({\varvec{\omega }}_1^* \in {\varvec{\varOmega }}\) such that

$$\begin{aligned} p_{{\scriptscriptstyle Y_1}}({\varvec{\omega }}_1^*) > p_{{\scriptscriptstyle Y_1}}({\varvec{\omega }}_1) \ \forall {\varvec{\omega }}_1 \in {\varvec{\varOmega }}{\setminus } \{{\varvec{\omega }}_1^*\} \end{aligned}$$
(40)

and that

$$\begin{aligned} p_{{\scriptscriptstyle Y_1}{\scriptscriptstyle Y_2}}({\varvec{\omega }}_1^*, {\varvec{\omega }}_2) < p_{{\scriptscriptstyle Y_1}{\scriptscriptstyle Y_2}}({\varvec{\omega }}_1, {\varvec{\omega }}_2) \end{aligned}$$
(41)

for all \( {\varvec{\omega }}_1 \in {\varvec{\varOmega }}{\setminus } \{{\varvec{\omega }}_1^*\}\) and for all \({\varvec{\omega }}_2\in {\varvec{\varOmega }}\). Thus, even though \({\varvec{\omega }}_1^*\) is \(Y_1\)’s most strongly believed event, the belief regarding the realization of any joint event for which \(\omega _1^*\) is \(Y_1\)’s realization is weaker than the belief regarding the realization of the corresponding joint event with any other \({\varvec{\omega }}_1\) as \(Y_1\)’s realization.

If, on the basis of (40) one were to enter a lottery to earn $1 if \({\varvec{\omega }}_1^*\) is realized, a fair entry fee would be \(q_1 > \frac{1}{2}\). On the other hand, if, on the basis of (41), one were to earn $1 if \({\varvec{\omega }}_1^*\) is not realized, then a fair entry fee would be \(q_2 > \frac{1}{2}\). By combining bets, one would be certain of winning $1 with a fair entry fee of \(q_1 + q_2>1\), therefore resulting in a sure loss.

It is immediate that the relationships given by (13) and (40) and by (14) and (41) are identical. Thus, sure loss is isomorphic to subjugation. \(\square \)

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Stirling, W.C., Felin, T. Satisficing, preferences, and social interaction: a new perspective. Theory Decis 81, 279–308 (2016). https://doi.org/10.1007/s11238-015-9531-y

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11238-015-9531-y

Keywords

Navigation