Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life

by Rory Sutherland

In the 1950s, the economist and political scientist Herbert Simon coined the term ‘satisficing’, combining as it does the words ‘satisfy’ and ‘suffice’. It is often used in contrast with the word ‘maximising’, which is an approach to problem-solving where you obtain, or pretend to obtain, a single optimally right answer to a particular question. As Wikipedia* helpfully explains, ‘Simon used satisficing to explain the behaviour of decision makers under circumstances in which an optimal solution cannot be determined. He maintained that many natural problems are characterised by computational intractability or a lack of information, both of which preclude the use of mathematical optimisation procedures. Consequently, as he observed in his speech on winning the 1978 Nobel Prize, “decision makers can satisfice either by finding optimum solutions for a simplified world, or by finding satisfactory solutions for a more realistic world. Neither approach, in general, dominates the other, and both have continued to co-exist in the world of management science.”’ Since then, I aver, the balance has shifted. The former approach – creating a simplified model of the world and applying a logical approach – is in danger of overpowering the other, more nuanced approach, sometimes with potentially dangerous consequences: the 2008 financial crisis arose after people placed unquestioning faith in mathematically neat models of an artificially simple reality.