| 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. |