Satisficing

Price Cost-to-serve Supplier rank Share of customer wallet (SCW) Overall satisf. Satisf. with competition Operating margin Total sales ( k) Share costs Competitor share costs... 

When rational choice is indeterminate, some other mechanism must take up the slack. That could be the principle of "satisficing," of choosing something that is good enough. The explanatory burden is then shifted to the notion of an aspiration... 

Heat test - - - - Satisf Satisf - - Satisf - Satisf Satisf Satisf... 

Conjunctive method (satisficing) Disjunctive method Lexicographic method Elimination by aspects Permutation method ORESTE... 

One may take this argument a step further. According to the "satisficing" school of theorists, not only is there no opposition between choice and necessity choices are only made out of necessity. In the normal course of events, firms follow routines that cannot in any reasonable sense be referred to as choices. Only when the current routine leads to a fall in profit below some critical level are the firms energized into actively searching for alternatives and comparing them to the status tjuo. 

In particular, the satisficing model appears very attractive when we turn to the problem of explaining technical change. Since the ex ante possibility and profltat ity of innovations are so hard to assess, it makes sense to argue that innovating firms are spurred by adversity rather than lured by profits. Let me draw attention to a passage in which Marx seems to propose a similar view ... 

Although one should not on the basis of this one text make Marx a precursor of the satisficing theory of innovation, there are other passages, quoted and discussed in 3.3.2 below, that point in the same direction. Since technical change is at the core of Marx s theory of capitalism, it is a point of some importance whether one finds its source in the inner drive of entrepreneurs to accumulate, or in external pressures created by the state or recalcitrant workers. 

I now return to the motivation behind capitalist innovation. If we assume that the capitalist is a consistent profit-maximizer, he will innovate maximally within the feasible set to the extent that it is known to him. Marx has little to say about the detenninants of the latter. In particular, he does not mention the vast extension of the set of economically-as distinct from technically - profitable inventions that were brought about by the introduction of the patent system. He does offer, however, some comments on the motivation behind capitalist innovation that are more specific than the rather general statement quoted above. These concern, first, the impact of technical change on the class struggle, and, secondly, the suboptimal consequences of the profit-maximizing criterion of innovation. The first problem is also linked to the issue of maximizing vs. satisficing" discussed in 1.2.1. 

---