From the BI Norwegian Business School via AlphaGalileo:
Decision-makers who are concerned with finding the best alternative are less satisfied with their choices than decision-makers who go for good enough.
Life consists of many choices great and small, and we often have many alternatives to choose from.
Which coffee to buy, which sofa to pick, where to go on vacation, what to buy for dinner today, which car to buy? Not choosing is also a choice.
What kind of decision-maker are you?
There are two kinds of decision-makers, says Professor Linda Lai at BI Norwegian Business School.
- 1. The maximizer: Are you concerned about finding the best alternative, from buying a new mobile telephone to hiring a new employee? If you consider many alternatives as thoroughly as possible, then you are probably a so-called maximizer – a person who seeks the perfect choice.
- 2. The satisficer: Would you rather choose that which meets your demands and expectations, even if it is not necessarily the best available? Do you know what you are looking for and are you impatient to make a choice? Then you are probably a so-called satisfizer.
These are extremes, and we are prone to make choices with varying degrees of maximization or satisfaction. And we may very well use different approaches in different areas, but most people have a tendency in one of the two directions.
One out of four is a maximizer
Linda Lai’s study looked at more than 3700 individuals to find out what type of decision-makers they were, and how satisfied they were with their choices.
The study shows that one in four of the participants in the study is a typical maximizer. They spend a lot of time finding the best alternatives even if the decision is not big or particularly important.
“Maximizers love looking for online information and can sit for hours, comparing heat pumps or mobile phones,” Lai asserts.
At the other end of the scale, one in four is a typical satisficer. They often only look at one or a few alternatives before choosing, and they often choose the first thing they find that is good enough.
Lai emphasises that what the satisficers find “good enough” is not necessarily worse than what the maximisers choose.
Satisficers use more rules of thumb, such as “expensive is best” to make quick decisions, and therefore often end up with very good results.
Eternal quest for the best
Maximisation might seem to be the best and most ambitious approach to making choices. However, the quest for the optimal choice can prove to be a double-edged sword, according to Linda Lai.
The study shows that maximizers like the decision-making process itself. They are happy spending hours online to obtain all available information. They are also optimistic about their ability to make sound decisions with maximum benefit.
Still, the maximizer is not happy with his or her choices. They often have doubts: Should I have chosen something else? Should I have waited for something better? And if something better does show up, their frustration is great.
The maximizers are therefore all sellers’ nightmare -they have more second thoughts and exercise their right of return more than anyone else. They are less loyal as customers and they more often cancel contracts to choose something they think is better.
“The quest for the best choice easily becomes a quest for something even better – a quest that never seems to end. The curse of the maximizer is that nothing ever stays good enough,” says Linda Lai.
Choices you can live with
Satisficers make it easier for themselves. They decide how high to set the bar, and close the deal the minute they find something that fits. They do not have the same motivation for doubt or regret.
As long as the choice is good enough, whether or not there may be better things out there is not a decisive issue. The satisfiers are therefore not as interested in reading about products they have already bought as the maximizers, who seek confirmation that they have made the right choice.
Linda Lai has also looked at whether executives are different from Norwegians in general in this regard.
“Executives are slightly less prone to be maximizers than others. They often do not have time to be very thorough when making choices, chasing the optimal choice takes time,” says Lai.