Analysis paralysis describes the situation where a decision is treated as over-complicated, with too many detailed options; when a person seeks an optimal or "perfect" solution upfront, and fears making any decision which could lead to erroneous results. In the end a choice is never made, despite the alternative of trying something and changing if a major problem arises. In this example the opportunity cost of decision analysis exceeds the benefits that could be gained by enacting some decision.
Herbert Simon (who researched cognitive psychology, politics, sociology, and computer science, among other fields) defined two cognitive styles: maximizers who try to make an optimal decision, and satisficers who simply try to find a solution that is "good enough". Maximizers tend to take longer making decisions due to the need to maximize performance across all variables and make tradeoffs carefully; and some suggest they also tend to more often regret their decisions.
Simon coined the word satisfice in 1956. He pointed out that human beings lack the cognitive resources to maximize. A more realistic approach to rationality takes into account these limitations, this is called bounded rationality. Bounded rationality is the notion that in decision making, rationality of individuals is limited by:
- the information they have (we usually do not know the relevant probabilities of outcomes),
- the cognitive limitations of their minds (we can rarely evaluate all outcomes with sufficient precision and our memories are weak and unreliable), and
- the finite amount of time they have to make decisions.
So what can I conclude from all this? Well, a rational person who adopts a realistic perspective is a satisficer; someone who recognizes that this kind of decisiveness is in the long run a more optimal solution than indecisiveness despite the initial appearance that it is a poor decision making strategy. (This reflects Tim Pychyl's anti-procrastination mantra "just get started.") Satisficers take an evolutionary approach to optimization, where some "accidental" solution is used so long as it works, and competing solutions are naturally selected such that the best ones are used and less optimal solutions either change or are no longer used. And in the final analysis, who is to say that an optimal solution exists (Zhuangzi had much to say on this subject)? Each solution has advantages and disadvantages, once the apparently worst options are removed, what remains may be qualitatively indistinguishable. Satisficers, and the process of evolution, both have no definite goal, or even a clear direction (in a sense). Perfectionists and maximizers do have a goal: making the optimal decision, and they insist on knowing what that is before they take any action. That is their weakness and eventual downfall.
Tags: decision making, indecisiveness, irrational delay, deferred gratification, analysis paralysis, satisficing, bounded rationality