Herbert Simon won the Nobel Prize in Economics in 1978 for an idea that most entrepreneurs resist: perfect decisions are not just difficult to make. They are structurally impossible. The choice is never between a perfect decision and a good enough one. It is between a good enough decision made now and a slightly different good enough decision made later — at the cost of everything lost in between.

Why optimisation is structurally unavailable

Simon’s bounded rationality framework established that the conditions required for optimisation — complete information, unlimited processing capacity, a finite option space — do not exist in any real decision environment. What decision-makers actually do is satisfice: search until they find an option that meets their criteria well enough, then stop.

This is not a cognitive shortcut. It is the rational response to genuine cognitive and informational limits. An entrepreneur gathering more information past the point where it changes the decision is not being thorough. They are engaging in decision avoidance with a rational-sounding label.

The stopping rule the framework implies is practical: gather information until it stops changing your decision. Then decide. Every hour of analysis beyond that point is not improving the decision — it is delaying the feedback that would have produced a genuinely better one.

What maximising actually costs

Schwartz and colleagues’ research across seven samples, published in the Journal of Personality and Social Psychology in 2002, produced one of the most replicated findings in decision psychology. Maximisers — people who seek the best possible option rather than a good enough one — showed negative correlations with happiness, optimism, and life satisfaction, and positive correlations with depression, perfectionism, and regret.

In one subsample, 44% of individuals whose scores met the criterion for mild depression fell in the top quartile for maximisation. Only 16% fell in the bottom quartile.

The mechanism is counterfactual activation. Maximisers, having considered more options before deciding, are left with a richer mental representation of what they did not choose. More considered alternatives means more available comparisons, which means more regret. The effort to make the best possible choice produces systematically worse psychological outcomes than the effort to make a good enough one.

One important nuance: a 2010 meta-analysis by Polman found that maximisers sometimes make objectively better decisions than satisficers when genuinely superior options exist. The case for satisficing is not that it always produces the best outcome. It is that it produces a better combination of outcome, speed, and wellbeing — which matters considerably more in the context of running a business across thousands of decisions than in a controlled laboratory setting.

The paradox of maximisation: considering more options produces more regret, not more satisfaction — regardless of whether the chosen option was objectively better.

The opportunity cost nobody counts

The third cost of perfectionist decision-making is the most practically significant and the least psychologically visible. Every decision delayed in pursuit of a better option is a decision for which no real-world feedback is received. Satisficing decisions made sooner generate the empirical data that would have enabled a better decision to be made.

The paradox is structural: the imperfect decision made quickly produces more information than the perfect decision made slowly. And more information produces better subsequent decisions. The entrepreneur who tests ideas quickly has a compounding advantage over the one waiting for ideal conditions — earlier mistakes are cheaper, improvements compound, and the feedback loop shortens over time.

Perfectionism applied to product decisions delays contact with reality, which is the only accurate source of information in an uncertain market. The first version of something should feel slightly uncomfortable to release. That discomfort is not a signal to keep refining. It is a signal you are moving at the right speed.

If perfectionist decision-making has become a persistent pattern that goes beyond strategic caution into something that feels compulsive or anxiety-driven — if it is affecting your ability to ship, hire, or commit — that is worth exploring with a professional. The psychological costs Schwartz documented are real and cumulative, and they respond to more than just intellectual reframing.

A book worth reading alongside this

The Lean Startup by Eric Ries is the most widely adopted applied satisficing framework in the entrepreneurial world. His minimum viable product concept is Simon’s bounded rationality theory in practice — the explicit argument that perfectionism before market contact is the primary failure mode of product development, and that learning through action is structurally superior to optimising before action.

This article discusses psychological patterns documented in research on decision-making and cognitive behaviour. It is not designed to identify, diagnose, or assess any psychological condition, and it is not a substitute for professional support. If these patterns are significantly affecting your work or wellbeing, speaking with a psychologist can provide personalised guidance that an article cannot.

This article is for educational and informational purposes only. It is not a substitute for professional psychological advice, diagnosis, or treatment. If you are experiencing significant psychological distress, please consult a qualified mental health professional.

Sources: Simon, H.A. (1956), Psychological Review, 63(2). Simon, H.A. (1955), Quarterly Journal of Economics, 69(1). Schwartz, B. et al. (2002), Journal of Personality and Social Psychology, 83(5). Polman, E. (2010), Journal of Behavioural Decision Making, 23(2).