Irrational Self-Interest

We 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The information on which they base choices can be wrong, out-of-date, or incomplete.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

The article you've been reading is an archived issue of Point Lookout, my weekly newsletter. I've been publishing it since January, 2001, free to all subscribers, over the Web, and via RSS. You can help keep it free by donating either as an individual or as an organization. You'll receive in return my sincere thanks — and the comfort of knowing that you've helped to propagate insights and perspectives that can help make our workplaces a little more human-friendly. More

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. Order from Amazon.com.

Your comments are welcome

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Emotions at Work:

Unintended Consequences

Sometimes, when we solve problems, the solutions create new problems that can be worse than the problems we solve. Why does this happen? How can we limit this effect?

Coping with Layoff Survival

Your company has just done another round of layoffs, and you survived yet again. This time was the most difficult, because your best pal was laid off, and you're even more fearful for your own job security. How can you cope with survival?

Toxic Conflict in Virtual Teams: Minimizing Authority

Toxic conflict in virtual teams is especially difficult to address, because we bring to it assumptions about causes and remedies that we've acquired in our experience in co-located teams. In this Part II of our exploration we examine how minimizing authority tends to convert ordinary creative conflict into a toxic form.

Staying in Abilene

A "Trip to Abilene," identified by Jerry Harvey, is a group decision to undertake an effort that no group members believe in. Extending the concept slightly, "Staying in Abilene" happens when groups fail even to consider changing something that everyone would agree needs changing.

Changing Blaming Cultures

Culture change in organizations is always challenging, but changing a blaming culture presents special difficulties. Here are three reasons why.

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

Forthcoming issues of Point Lookout

Coming July 28: Be Choosier About Job Offers: II

An unfortunate outcome of job searches occurs when a job seeker feels forced to accept an offer that isn't a good fit. Sometimes financial pressures are so severe that the seeker has little choice. But financial pressures are partly perceptual. Here's how to manage feeling that pressure. Available here and by RSS on July 28.

And on August 4: What Are the Chances: I

When estimating the probabilities of success of different strategies, we must often estimate the probability of multiple events occurring. People make a common mistake when forming such estimates. They assume that events are independent when they are not. Available here and by RSS on August 4.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenXEiRBfuFHUtjHrqUner@ChacpYPvvSVhUNIOeXHKoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

• Get 2001-2 in Geese Don't Land on Twigs (PDF, )
• Get 2003-4 in Why Dogs Wag (PDF, )
• Get 2005-6 in Loopy Things We Do (PDF, )
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
• Get 2009-10 in The Questions Not Asked (PDF, )
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500-1000 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

The Power Affect: How We Express Our Personal Power

Many people who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.

• A recording of a program presented June 29, 2017, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
   
• A recording of a program presented June 29, 2017, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
   

Bullet Points: Mastery or Madness?

Decision makers in modern organizations commonly demand briefings in the form of bullet points or a series of series of bullet points. But this form of presentation has limited value for complex decisions. We need something more. We actually need to think. Briefers who combine the bullet-point format with a variety of persuasion techniques can mislead decision makers, guiding them into making poor decisions. Read more about this program.

• A recording of a program presented June 24, 2020, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
   
• A recording of a program presented June 24, 2020, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.