"Satisficers"

It's quite fascinating to reflect on how irrational people can be.

And it's perfectly normal to be irrational. We can't be completely rational all the time right? 

This irrationality is part of our bounded rationality. According to Herbert Simon, recipient of the Nobel Prize in Economics in 1975, people have cognitive limitations and because of that, we go about making sub-optimal decisions in our everyday lives. Through this lens, people unconsciously act as "satisficers" in their decision-making, seeking to make a satisfactory decision instead than an optimal one. In order to facilitate the decision-making process, we act on instincts, habits, heuristics, cognitive illusions, and biases - leading us to "satisficing" decisions.

This is innate within all people. During this unconscious part of the decision-making process, we formulate stories - stories that support our beliefs.

Thomas Gilovich, Author and Professor of Psychology at Cornell University who has contributed to the behavioral economics field, describes these stories as a result of "Patternicity", the tendency to create meaning from events. While this evolved trait (think hunter-gatherers hearing rustling in the grass and believing it might be a predator) greatly served our ancestors, "patternicity" leads to irrationality, poor decision-making & bias.

While the topic of ethics relating to behavioral economics makes for another blog post, marketers have been using the underlying biases in "satisficers" to create effective marketing campaigns advantage for decades. From loss aversion to anchoring, there are plenty of biases for marketers to utilize. With that being said, potential consumers can offset this targeting by being "intuitive scientists" - a nice little secret from Thomas in the video above.

 Image Credit:  Behavioral Scientist

Image Credit: Behavioral Scientist