May 18, 2005	Volume 5, Issue 20
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Irrational Self-Interest

by Rick Brenner

When we try to influence others, especially large groups or entire companies, we sometimes create packages of incentives and disincentives that are intended to affect behavior. These strategies usually assume that people make choices on rational grounds. Is this assumption valid?

e often assume that people are motivated by rational self-interest. In this model of behavior, people make choices that they calculate will benefit them most, and most directly. If we want to predict behavior, or direct it, all we have to do is provide the right "incentives" or "disincentives" and we can get people to do what we need them to do.

If only Life were that simple.

Although predictions on the basis of the rational model can be successful, some have come to believe that strict adherence to the rational model is not only limiting, but often wrong.

The problem is that sometimes people don't choose rationally, and even when they do, they often choose differently from what we might expect if we consider only the content of the issue. Here are some reasons why.

It's always a judgment call

In the organizational context, the consequences of choices are rarely all good or all bad. People have to decide what they care about and how much, and people do differ.

Some people react to the past Sometimes people don't
choose rationally. Even
when they do, they
apply their own judgment,
not yours.

Something about the situation might trigger responses from childhood, or from other experiences. People then react to those past experiences instead of reacting to the here-and-now.

Some are overloaded

Some people must choose quickly, because of real or perceived time pressure. In haste, they make choices that differ from those they would make if they felt they had more time.

Some feel peer pressure

Some make choices on the basis of the choices they perceive others making. They want either to be like others, or to be unlike others.

Some fear imaginary consequences

When they lack concrete knowledge, some people make up some pretty terrifying scenarios. Then they react to what they've imagined, instead of to what is.

Some have wrong information

The information on which they base choices can be wrong, out-of-date, or incomplete. Or they might have misunderstood or forgotten the information they did have.

Some seek revenge

Anger or thirst for revenge can cause some to make choices to harm others, ignoring (or blinded to) consequences that are seriously harmful to themselves.

Some have received bad advice

Even when people have all the facts right, some follow bad advice or misguided (or worse) leaders.

Some have cut deals

Sometimes people make choices that are counter to their own interests, because — rightly or otherwise — they expect someone else to intervene or to support them in another context.

Finally, some believe that the world consistently works in ways that it does not. This can cause them to make choices that might not be in their own self-interest — they might even choose to use the rational model to devise ways to influence the choices of others.  Top    Next Issue

For more on irrational decision-making, see the report by Paul Solman on the May 10, 2005, edition of the PBS program The News Hour with Jim Lehrer. The report is available in text, streaming audio, or streaming video. It emphasizes the work of Terry Burnham, author of Mean Markets and Lizard Brains: How to Profit from the New Science of Irrationality, published in 2005 by Wiley.

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More articles on Emotions at Work:

Celebrate!

When you celebrate — even minor successes — you change your outlook, you energize yourself, and you create new ways to achieve more successes. Too often we let others define what we will celebrate. Actually, we're in complete command of what we celebrate. When we take charge of our celebrations, we make life a lot more fun.

When You Make a Mistake

We've all made mistakes, and we'll continue to do so for as long as we live. Making mistakes is part of being human. Still, we're often troubled by our mistakes, even when we remember that many mistakes turn out to be great gifts. Why do we have such a hard time acknowledging mistakes?

Think in Living Color

Feeling trapped, with no clear way out, often leads to anger. One way to defuse your anger is to notice false traps, particularly the false dichotomy. When you notice that you're the target of a false dichotomy, you can control your anger more easily — and then the trap often disappears.

What's So Good About Being Laid Off?

Layoffs during the holiday period of November 15 through January 15 are far more common than you might think. Losing your job, or fearing that you might, is always difficult, but at this time of year it's especially helpful to keep in mind that the experience does have a bright side.

Coping with Problems

How we cope with problems is a choice. When we choose our coping style, we help determine our ability to address the problems we face. Of eight styles we can identify, only one is universally constructive, and we rarely use it.

See also Emotions at Work, Effective Meetings and Effective Communication at Work for more related articles.

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Public seminars

Person-to-Person Communication for Project Managers

When we talk, listen, send or read emails, read or write memos, or when we leave or listen to voice mail messages, we're communicating person-to-person. And whenever we communicate person-to-person, we risk being misunderstood, offending others, feeling hurt, and being confused. There are so many ways for things to go wrong that we could never learn how to fix all the problems. A more effective approach avoids problems altogether, or at least minimizes their occurrence. In this very interactive program you'll learn a model of inter-personal communications that can help you stay out of the ditch. In those moments of intense involvement, when we're most likely to slip, you'll have a new tool to use to keep things constructive. Read more about this program. Here are some upcoming dates for this program:

• Download to
  your calendarThe Machine Shed, 11151 Hickman Road, Urbandale, IA 50322: February 16, Breakfast Meeting, Central Iowa Chapter of The Project Management Institute. Register now.
   
• Download to
  your calendarThe Hotel Fort Des Moines, 1000 Walnut Street, Des Moines, Iowa 50309: February 16, Lunch Meeting, Central Iowa Chapter of The Project Management Institute. Register now.
   
• Houston, Texas: May 8, Monthly Meeting, Houston Chapter of the Project Management Institute.
   
• Houston, Texas: May 9, Monthly Meeting, Houston Chapter of the Project Management Institute.
   

The Race to the South Pole: The Power of Agile Development

On 14 December 1911, four men led by Roald Amundsen reached the South Pole. Thirty-five days later, Robert F. Scott and four others followed. Amundsen had won the race to the pole. Amundsen's party returned to base on 26 January 1912. Scott's party perished. As historical drama, why this happened is interesting enough. Lessons abound. Among the more important lessons are those that demonstrate the power of the agile approach to project management and product development. Read more about this program. Here's an upcoming date for this program:

• Download to
  your calendarSt. George Banquet Hall, Kitchener, Ontario: March 6, Dinner Meeting, Canada's Technology Triangle Chapter of the Project Management Institute. Register now.
   

Human-Centered Risk Management

Most of us can assess technological risks, but risks related to human behavior tend to resist our best efforts. This session provides a framework for evaluating risks related to the behavior of individuals, teams, organizations and people generally. Human-centered risk differs from technological or market risk, because objective evaluation requires acknowledging personal and organizational limitations and failures. Since some of those limitations and failures might apply to the people assessing the risks, or to their superiors, there's a tendency to deny them or to explain them away. Our approach examines capability, organization, context, risk mitigation, and workplace politics. It has tools for guiding the assessment and management of human-centered risk, and we show how to extend these tools to suit your situation. You'll learn how to identify sources of risk in human behavior; recognize systemic and individual barriers to acknowledging risk; assess the effects of organizational turbulence; determine the risk associated with inappropriate internal risk transfer; estimate the effects of team dysfunction, toxic conflict and turnover; and measure the impact of workplace politics. Read more about this program. Here's an upcoming date for this program:

• Download to
  your calendarMITRE, in Bedford, Massachusetts: March 20, Monthly Meeting, Boston SPIN. Register now.
   

The Race to the South Pole: Ten Lessons for Project Managers

On 14 December 1911, four men led by Roald Amundsen reached the South Pole. Thirty-five days later, Robert F. Scott and four others followed. Amundsen had won the race to the pole. Amundsen's party returned to base on 26 January 1912. Scott's party perished. As historical drama, why this happened is interesting enough, but to project managers, the story is fascinating. Lessons abound. Read more about this program. Here's an upcoming date for this program:

• Columbia, Missouri: May 17, Full-Day Workshop, Mid Missouri Chapter of the Project Management Institute.
   

Project Management in Fluid Environments

Most people now work in environments that can best be characterized as fluid, because they're subject to continual change. We never know what's coming next. In such environments, managing — teams, projects, groups, departments, or the enterprise — often entails moving from surprise to surprise while somehow staying almost on track. It's a nerve-wracking existence. This program provides numerous tools that help project managers who work in fluid environments. Read more about this program. Here's an upcoming date for this program:

• Columbia, Missouri: May 17, Monthly Meeting, Mid Missouri Chapter of the Project Management Institute.
   

The Politics of Meetings for People Who Hate Politics

There's a lot more to running an effective meeting than having the right room, the right equipment, and the right people. With meetings, the whole really is more than the sum of its parts. How the parts interact with each other and with external elements is as important as the parts themselves. And those interactions are the essence of politics for meetings. This program explores techniques for leading meetings that are based on understanding political interactions, and using that knowledge effectively to meet organizational goals. Read more about this program. Here's an upcoming date for this program:

• Rochester, New York: May 24, Professional Development Day, Rochester Chapter of the Project Management Institute.