"Axiomatic Foundations for Satisficing Behavior"  



Christopher J. Tyson		



Abstract:

A theory of decision making is proposed that supplies an axiomatic basis
for the concept of "satisficing" postulated by Herbert Simon. After a 
detailed review of classical results that characterize several varieties 
of preference-maximizing choice behavior, the axiomatization proceeds by 
weakening the inter-menu contraction consistency condition involved in 
these characterizations. This exercise is shown to be logically equivalent
to dropping the usual cognitive assumption that the decision maker fully 
perceives his preferences among available alternatives, and requiring 
instead merely that his ability to perceive a given preference be weakly 
decreasing with respect to the relative complexity (indicated by set inclusion)
of the choice problem at hand. A version of Simon's hypothesis then emerges 
when the notion of "perceived preference" is endowed with sufficiently strong
ordering properties, and the axiomatization leads as well to a constraint on 
the form of satisficing that the decision maker may legitimately employ.

January 2005
 
JEL Classification Numbers: D01, D71, D81
 
Keywords: Choice Function, Cognition, Revealed Preference, Threshold