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Myrosinase Maximizers
March 12, 2010 — 1:13 am

Two and a half years ago (can it really have been that long?) I wrote over at Show-Me Daily about Barry Schwartz’s “paradox of choice” theory. An excerpt:

Sometimes eliminating choices is a business strategy that makes sense. Some restaurants are getting rid of menus, some supermarkets are paring down the number of items on their shelves, and the Internet is filled with advice on how to make decisions effectively — suggesting that there’s a wide range of people out there that needs help coping with the bewildering array of choices life has to offer them.

So, yes, I grant all of this. And yet … it’s easy to forget that the long tail has become the basis for the most valuable new business plans of the Internet age. The idea here is that people have such widely varied tastes that the many items people buy very little of, with low market share, add up to a mass of options that rivals the popular items that nearly everybody buys.

Schwartz coined a couple of terms for different types of deision-makers: "maximizers" and "satisficers."

Maximizers are the people who try to find the best of whatever they’re choosing — the best new car, the best brand of toothpaste, the best hamburger, etc. These people may enjoy their optimal choices more than other people enjoy their subpar choices, but there’s a large opportunity cost in pursuing knowledge of the "best" choice.

Satisficers, on the other hand, choose things that are "good enough." They don’t second-guess whether there’s a better brand of peanut butter if the brand they’ve already purchased results in satisfactory sandwiches.

Schwartz essentially argues that satisficers are happier than maximizers because they don’t expend an inefficient amount of time and energy looking for goods that are only marginally better than things they would be satisfied with. And his argument might make sense if people fit exclusively into one or the other of his categories.

But the fact is that everybody is both a maximizer and a satisficer, just for different sets of choices. As Virginia Postrel argued in Reason:

Since different people care intensely about different things, only a society where choice is abundant everywhere can truly accommodate the variety of human beings. Abundant choice doesn’t force us to look for the absolute best of everything. It allows us to find the extremes in those things we really care about, whether that means great coffee, jeans cut wide across the hips, or a spouse who shares your zeal for mountaineering, Zen meditation, and science fiction.

A world in which there’s an ever-expanding array of choices means I get to maximize my music preferences by listening to Zorn and Zappa while others can satisfice theirs with Lavigne and Timberlake. It also means that some people can maximize their preference for vehicles with luxury BMWs or SUVs, while I can satisfice with my trusty Hyundai Elantra. And it means that while David Stokes can satisfice his baby bottle needs with whatever’s on sale, somebody else who’s looking for certain characteristics in a bottle that David might not care about, or have even considered, can find what they’re looking for as well.

So, I was particularly happy to stumble across this piece from The Onion today. It’s a reminder that most people tend to be maximizers about some aspect of their lives. That line will be drawn in radically different places for different people, but the rest of us frequently benefit from the externalities of their trailblazing obsessions.

— Eric D. DixonComments (1)

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1 Comment
  1. I thought it was Herbert Simon who coined the term “satisfice.” And I thought the point was that we did not maximize our total happiness — preferences over all opportunities — because we could not calculate the costs of the bulk of our choices.

    My understanding of this may be skewed by having read Alchian on the subject, who preceded Simon in his critique of maximization.

    H.H. Gossen is the classic advocate of maximization.

    Comment by twv — March 21, 2010 @ 8:15 pm

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Eric D. Dixon

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