Time to Settle: An Argument for Satisficing



Settling. It sounds dirty. Maybe even a bit sad. It sounds like you’ve given up. You’re frustrated and just can’t take anymore. You just settle for whatever next comes along. Just to be done with it. But what’s the alternative? Not settling, but looking for the perfect something? Chasing dreams? Chasing perfection even? Looking for an optimum that might not even exist? You can think of settling what you like, but this endless chase doesn’t sound extremely attractive either, now does it?


 

In many of my previous articles I outline that time is one of the most, if not the most, important resources. As such, spending your time optimally is key. I would even argue you should maximize the way you use your time, at the expense of your other resources (if possible). But that’s not really what economics teaches. When looking at the homo economicus, the ultimate economics teacher, we see that they are a utility maximiser. Maximizing as in: getting the best. Aiming for the highest level of utility. In the example I gave in the “25 things I learned from BE” article, I outlined how this attitude can get you absolutely nowhere. Let me explain. Imagine you’re looking for a new phone. As a utility maximiser you will research the market, see what’s available, rank them (or apply a different logical elimination process), and pick the best. Sounds simple, but it isn’t. The market for mobile phones is very dynamic. New releases are almost constant. Moreover, technology updates relatively quickly anyway. And this isn’t even the only constraint. Your preferences matter too. And your budget constraints. And context effects. And you know, basic functionality and you knowing how to operate a phone. So in the end you’re more likely to be overwhelmed and lost than anything else, especially if you're not really at home in the phone market. And by the time you have figured out what you want, what the market has to offer and how these two align, the market will have updated. You’ll need to do some more research. WILL THIS EVER END?!


 

Good thing we’re only talking about mobile phones here. Can you imagine this process when you have to pick a house to live in, whether to have a surgery (or not, and with whom), or to pick a partner for life?! In the end, you just need to settle on something. Make a choice. Cut your losses, cut the FOBO and just pick one. Commit! This is known as satisficing. Where you pick an option which satisfies a list of criteria that you've set out for it (specs, price, colour, GB etc.) but need not go beyond that. Not the best one, but one that matches what you wanted from a phone in the first place. Of course, there’s always that nagging voice in the back of your head. Could you have done better? Should you have waited longer to decide? Were you too impulsive? This voice is just FOBO, Fear Of a Better Option. Because often, and I do mean often, having committed to something, even if it’s just for the sake of being able to stop searching, will give you more peace of mind than finding something “slightly more optimal” after several additional hours. I promise. I've tried.


 

But there is one massive condition when it comes to obtaining that peace of mind: you need to stop doing market research once you’ve committed. It only stimulates regret. And regret can seriously alter the utility you’re experiencing. Regret, or regret theory rather, was proposed by Graham Loomes and Bob Sugden. They posed that your subjective utility of a choice decreases once you see the outcomes of other choices as well, granted that you could have done (slightly) better. It’s a similar thing to silver medalists being less satisfied than bronze medalists. You know the alternative, and you were so close. That’s regret, and it reduces the utility of your current choice (or outcome, winning silver isn't exactly a choice). So, don’t continue looking. Be happy with what you have, and learn to appreciate it for what it is.


 

So, this type of utility maximizing very often focuses on resources such as money. Getting the most bang for your buck. And I’m not saying that money doesn’t matter, I suffer a lot of budget constraints too, but there’s more to utility than spending money. And that’s what I’m trying to convey in this article. As I’ve outlined, finding “the best” is a very lengthy process. Budget constraints often aren’t helping either, especially if you’re aware of “better” things that happen to be more expensive, meaning you can’t afford them. This all matters. But by this stage, you have to ask yourself whether money is your most important resource. As I’ve said before, I value time more (within my budget constraints). So I don’t really derive utility, or any form of happiness, from spending hour upon hour scouring for the best deal. I just don’t. If I need a new phone, I set a budget and some other constraints (GB, screen size, delivery time, my friends’ thoughts (I’m not really an expert on technology)), and I move from there. I can buy a phone in under an hour, granted I’ve talked to my friends beforehand. Done and dusted. Money spent, time saved, customer satisfied.


 

So if you’re one of these people who can never commit to anything, ask yourself why? Are you scared of regret? Because there’s some really funny pictures of people who have gotten “no regrets” tattooed on them, and it’s spelled wrong. If your choice isn’t of that magnitude, I feel like it’s quite safe to commit. You'll be fine. Or do you feel like something better might come along? I’ve also written an article about FOBO. It’s a real problem. If you suffer this constantly, read the article for some serious insights! Even if you don't read the article, just make sure to ask yourself this: will you derive more utility from a continuous and potentially fruitless search that takes ages of your time, or, would you be better off committing to something now, and being able to spend that time differently? Your choice.

Behavioural Science