Axiomatic Foundations for Satisficing Behavior∗

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. JEL classification codes: D01, D71, D81.