Satisficing for LLMs
Satisficing is one of the most important and yet least understood ideas in marketing. The idea comes from Nobel Prize-winning economist Herbert Simon and is a portmanteau of "satisfy" and "suffice." The basic premise is that a much more reasonable model of human behavior than the popular economic concept of utility maximization is that, when we make decisions, we ensure that we clear an arbitrary satisfaction threshold (satisfy) and then give up excess utility for ease (suffice). Here's Simon from his 1956 paper "Rational choice and the structure of the environment":
The central problem of this paper has been to construct a simple mechanism of choice that would suffice for the behavior of an organism confronted with multiple goals. Since the organism, like those of the real world, has neither the senses nor the wits to discover an "optimal" path — even assuming the concept of optimal to be clearly defined — we are concerned only with finding a choice mechanism that will lead it to pursue, a "satisficing" path, a path that will permit satisfaction at some specified level of all of its needs.
Simon won a Nobel for his work on bounded rationality, of which satisficing is a component. To me, it’s a perfect way to articulate why emotional messages resonate more than intellectual ones. Consumers realize, even if they can’t articulate it, that in most categories the choice between products is relatively small (despite the protestations of each brand). So, rather than spending time making a perfectly rational decision about the optimal product, they go with the easiest-to-buy option that also meets their price, quality, etc. standards. My go-to example is toothpaste: you could read the back of every box in CVS to decide the optimal brand for purchase, or you could trust that CVS wouldn’t carry junk and choose the first one that you recognize (it’s the one with Scope for me, I can’t even remember the brand at the moment). What’s easiest to buy is usually the thing that’s a) available in front of you and b) recognizable.
How AI Changes the Choice
One of the fundamental questions I have about these models is that if you assume they will continue to become more important mediators of product decisions for consumers (which I do), then a major question for marketers is going to be how you persuade and market to the models and whether that represents a fundamentally different communications approach than the one they’ve historically taken with consumers. Specifically, I’m curious whether the kind of rational persuasion that marketers shy away from—“feeds and speeds” is the pejorative term some folks in the industry use—will actually be the thing that convinces a language model to recommend your brand or product.
