What Makes a Good Decision? Robust Satisficing as a Normative Standard of Rational Decision Making

Abstract

Most decisions in life involve ambiguity, where probabilities can not be meaningfully specified, as much as they involve probabilistic uncertainty. In such conditions, the aspiration to utility maximization may be self-deceptive. We propose “robust satisficing” as an alternative to utility maximizing as the normative standard for rational decision making in such circumstances. Instead of seeking to maximize the expected value, or utility, of a decision outcome, robust satisficing aims to maximize the robustness to uncertainty of a satisfactory outcome. That is, robust satisficing asks, “what is a ‘good enough’ outcome,” and then seeks the option that will produce such an outcome under the widest set of circumstances. We explore the conditions under which robust satisficing is a more appropriate norm for decision making than utility maximizing.

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References found in this work

The Foundations of Statistics.Leonard J. Savage - 1954 - Wiley Publications in Statistics.
An Essay Concerning Human Understanding.John Locke - 1689 - London, England: Oxford University Press.
Risk, Uncertainty and Profit.Frank Knight - 1921 - University of Chicago Press.
Rational Choice and the Structure of the Environment.Herbert A. Simon - 1956 - Psychological Review 63 (2):129-138.

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