Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 5, Issue 20;   May 18, 2005: Irrational Self-Interest

Irrational Self-Interest

by

Last updated: July 18, 2019

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?

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.

Carrot and stickIf 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The information on which they base choices can be wrong, out-of-date, or incomplete.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. Go to top Top  Next issue: An Agenda for Agendas  Next Issue

Rick BrennerThe 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

Mean Markets and Lizard Brains: How to Profit from the New Science of IrrationalityFor 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

Would you like to see your comments posted here? rbrenuQKLUMsVubCpqOpqner@ChacCCvpZbzKGsgliMGNoCanyon.comSend me your comments by email, or by Web form.

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:

HatsYou Remind Me of Helen Hunt
At a dinner party I attended recently, Kris said to Suzanne, "You remind me of Helen Hunt." I looked at Suzanne, and sure enough, she did look like Helen Hunt. Later, I noticed that I was seeing Suzanne a little differently. These are the effects of hat hanging. At work, it can damage careers and even businesses.
The birthday girlAfter the Accolades: You Are Still You
Have you had a major success lately? Have you become a celebrity in your organization? Are people showering you with accolades? When it happens, we feel great, and the elation does finally come to an end. What then?
Pain in the heartIf You Weren't So Wrong So Often, I'd Agree with You
Diversity of perspectives is one of the great strengths of teams. Ideas contend and through contending they improve each other. In this process, criticism of ideas sometimes gets personal. How can we critique ideas safely, without hurting each other, while keeping focused on the work?
A visual illusionScope Creep and the Planning Fallacy
Much is known about scope creep, but it nevertheless occurs with such alarming frequency that in some organizations, it's a certainty. Perhaps what keeps us from controlling it better is that its causes can't be addressed with management methodology. Its causes might be, in part, psychological.
Many different viewpoints make for many different choicesOn Differences and Disagreements
When we disagree, it helps to remember that our differences often seem more marked than they really are. Here are some hints for finding a path back to agreement.

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

Forthcoming issues of Point Lookout

A meeting held in a long conference room.Coming July 8: Multi-Expert Consensus
Some working groups consist of experts from many fields. When they must reach a decision by consensus, members have several options. Defining those options in advance can help the group reach a decision with all its relationships intact. Available here and by RSS on July 8.
A dictionaryAnd on July 15: Disjoint Concept Vocabularies
In disputes or in problem solving sessions, when we can't seem to come to agreement, we often attribute the difficulty to miscommunication, histories of disagreements, hidden agendas, or "personality clashes." Sometimes the cause is much simpler. Sometimes the concept vocabularies of the parties don't overlap. Available here and by RSS on July 15.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenuQKLUMsVubCpqOpqner@ChacCCvpZbzKGsgliMGNoCanyon.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:

Reprinting this article

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 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 The Power Affect: How We Express Personal Powerpeople 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.

Bullet Points: Mastery or Madness?

DecisBullet Point Madnession-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.

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Twitter, or share a tweet Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
101 Tips for Managing ConflictFed up with tense, explosive meetings? Are you the target of a bully? Learn how to make peace with conflict.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.
If your teams don't yet consistently achieve state-of-the-art teamwork, check out this catalog. Help is just a few clicks/taps away!
Ebooks, booklets and tip books on project management, conflict, writing email, effective meetings and more.