Bounded rationality is a very practical concept that encourages focus on the real world as opposed to the perfect worlds that often exist in theory and academia. In essence it just say that you need to make the best decision that you can with the real constraints that your facing regarding to your information, cognitive ability and time. In other words, it’s not possible to make a perfect decision, so instead make one that is good enough.
Of course, in work it’s always possible to seek more information, throw more thinking ability at a problem or seek to extend deadlines. While all these options are often possible, we’re not convinced that they always lead to better decisions being made. In many instances though it’s better to make good decision quickly than it is to make a slightly better decision further in the future.
In words commonly attributed to Voltaire that we heartily agree with, ”perfect is the enemy of good”.
Not only is this true in work, but it’s also very true in many aspects of life. Satisficing is usually a dominant strategy because the marginal benefit of pursuing better decisions is diminishing and, perhaps more importantly, because the effort required in making decisions is draining (leading to ego depletion – which we have yet to write about).