Is Your Negotiating Partner Behaving Irrationally? Love in a Tit for Tat World
Baz Luhrmann's hallucinatory Romeo and Juliet, the ultimate Shakesperean lesson in the dangers of fiercely playing Tit for Tat.
The Americans are fond of explaining almost all the actions of their lives by the principle of self-interest rightly understood. In this respect I think they frequently fail to do themselves justice. -- Alexis de Tocqueville
We've mentioned these principles before:
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negotiators will reflexively play the childhood game of tit for tat (you cooperate, I cooperate; you defect, I punish; you cooperate, I cooperate again) because, as the game theorists tell us, we evolved as a human society as a result;
- negotiators are also inequality averse, just like the capuchin monkeys who act against their own apparent self-interest by refusing to work when one of their fellows begins making five times the salary for the same amount of work.
Herbert Gintis, an Emeritus Professor of Economics at the University of Massachusetts, discusses these issues in Game Theory and Human Behavior.
The point of the following excerpts from Professor Gintis' research is this -- what negotiators tend to call irrational bargaining behavior -- not accepting an objectively "good deal" -- is not necessarily irrational or "overly emotional." It is simply driven by considerations that hard numbers do not explain.
Gintis explains:
The inequality-averse individual is willing to reduce his own payoff to increase the degree of equality in the group (whence widespread support for charity and social welfare programs). But he is especially displeased when placed on the losing side of an unequal relationship.
Indeed, the inequality-averse individual is willing to reduce his own payoff if that reduces the payoff of relatively favored individuals even more. In short, an inequality-averse individual generally exhibits a weak urge to reduce inequality when he is the beneficiary, and a strong urge to reduce inequality when he is the victim.
And what does the good professor say about "players" who are more interested in the relativity of pay-offs rather than the absolute number at issue. He calls them "decent people."
"We should note," writes Gintis,
that there is a deplorable tendency for people to call other-regarding [i.e., generous or group-oriented] individuals “irrational.” Of course, in no meaningful way does rationality imply self-regarding [i.e., self-serving] preferences.
It is just as “rational” for me to prefer to have you enjoy a fine meal as for me to enjoy the meal myself. It is just as “rational” to enjoy being virtuous as it is to enjoy [receipt of material rewards]. It is just as “rational” for me to care about the rain forests as to care about my beautiful cashmere sweater. And it is just as “rational” to reject an unfair offer as it is to discard an ugly article of clothing.
"Indeed," opines Gintis, "people who are self-regarding are in common parlance called sociopaths."
A sociopath (e.g., a sexual predator, a recreational cannibal, or a professional killer) treats others instrumentally, caring only what he derives from an interaction, whatever the cost to the other party. In fact, for most people, interpersonal relations are guided as much by empathy (and hostility) as by self-regard.
Indeed, the principle of sympathy is the guiding theme ofAdam Smith’s great book The Theory of Moral Sentiments, despite the fact that his self-regarding principle of the invisible hand is one of the central insights of economic theory.
The lesson for negotiators? It's small but powerful. We get farther by treating the needs, objectives, wishes, goals and desires of others as matters of fact, rather than as matters of logic. It does us no good to repeatedly insist that the other side is "dreaming," or "crazy" or "vindictive." It will, however, do us a great deal of good to explore what is motivating the apparently self-defeating behavior.
Gintis reminds us that we can just as rationally choose equitable distributions for all as we "rationally" choose "a bundle of consumption goods subject to a budget constraint."
Alas, poor Romeo. He chose love in a tit-for-tat world. End of scene -- Mercutio dies and Romeo kills Tybalt.
