When suboptimal is superoptimal: Sunday, April 18, 2004

Academics usually do not fly first class unless there is a strange reason. In my case today there was - the airline messed up and I found myself in seat 1A coming back across the country from Massachusetts to California, a route I have flown more than 50 times in my life before, but never in first class; but I digress.

Sitting up in the front usually comprises a return to infancy. You sleep, go to the toilet, and generally get fed (which mimics closely my first 12 months of life). So here is the strange thing - when the purser began asking me which of the various meals I would like for dinner, I just took the first one, even before he completed telling me what they all were. The first option was something I liked, and I just took it, passing up the chance at something better. When he asked me - "Don't you want to know what else there is?" - I simply said "no." I was happy, content. I enjoyed this meal more than any other on a flight, I had gotten exactly what I wanted, no choice costs and no opportunity costs. Why don't we always make decisions this way?

(a) By stopping at the first acceptable choice, we have low choice costs, for we do not have to choose between many alternatives, just one at a time. Thats easy.

(b) By not knowing the other options, there are no opportunity costs, no regrets. Just satisfaction.

You know, this works for me. I just realized that I am not an optimizer. Nor am I a satisficer. Maybe I am just easy to please. Are all people that are easy to please likely to make decisions in this way? Who knows? Its not bad being a simpleton. We like making choices by Dutch auction.

Now what if that first option was clearly below a threshold? Then just move on to the next one. Take it one at a time. If the chance of the option being acceptable (not optimal) is 50 percent, then there is a very small chance that you need to look beyond 4 choices. You may not reach the optimal, but you will surely be happy. Which is often not what we are when we have made the best choice.

In a word, just make a good choice, and stop worrying about making the best one.