Satisficing Equilibria: A Non-Classical Theory of Games and Decisions

Satisficing, or being “good enough,” is the fundamental obligation of rational decision makers. We cannot rationally choose an option, even when we do not know of anything better, unless we know it is good enough. Unfortunately, we are not often in the position of knowing that there could be no better option, and hence that the option must be good enough. A complete search through all logical possibilities is often impractical, particularly in multi-agent contexts, due to excessive computational difficulty, modeling complexity, and uncertainty. It can be equally impractical, if it is even possible, to determine the cost of the additional required search to find an option that is good enough. In a departure from the traditional notion of satisficing as a species of bounded rationality, satisficing is here redefined in terms of a notion of intrinsic rationality. Epistemic utility theory serves as the philosophical foundation of a new praxeological decision-making paradigm of satisficing equilibria that is applicable to both single- and multiple-agent scenarios. All interagent relationships are modeled by an interdependence function that explicitly accommodates both self and group interest, from which multilateral and unilateral selectability and rejectability mass functions can be derived and compared via the praxeic likelihood ratio test.