WHY USELESS IS BETTER THAN USEFUL
We at Mobus Creative Negotiating emphasize that people are not always rational: they often react emotionally even when that reaction does not appear to be in their best interest. We draw on the research of modern economics – often called “behavioral economics” – which has shown how often emotions trump reason. That is a huge change from “classical economics” which taught that people are “rational economic actors” who calculate what is in their best interest.
A wonderful example of the difference in approach is: gift-giving. Classical economists have for years scolded people about giving gifts: they say that the best gift is money, because the recipient has a better idea of what he wants than does the gift-giver. Classical economists argue that much of the money spent on a gift is wasted, because the gift won’t be as efficient at meeting the recipient’s wants as if the recipient got cash instead.
Modern economists have stood that reasoning on its head. By exploring what people value in gifts, they found that what people really appreciate is the emotional impact of a gift. As explained by Arthur Brooks, president of the American Enterprise Institute, in a New York Times article, https://www.nytimes.com/2017/
“It is the thought that counts” in the words of the old saying.
Brooks refers to the classical economists as “soulless utilitarians.” Not a bad judgment. For we negotiators, what is more important is that their viewpoint does not work: they do not understand what is going to sway people. If we want to move the other side, we need to know how to make them feel better about a deal, how to get them emotionally accepting of the deal. The “gut feeling” about a deal is likely to be much more important than any amount of careful, detailed explanation of the benefits the deal will bring them. We can get a better deal if we can connect with the other side’s wants, rather than offering them financial concessions they may not value as much. People are not rational calculators: they are complicated, multi-faceted creatures.
