Today’s Boston Globe, my hometown rag, features a story on behavioral economics, a field of study which seeks to understand the psychology of economics—why do people behave the way they do in the marketplace?
This article describes studies of primate behavior which seem to indicate we humans possess an evolutionary tendency to prefer avoiding loss over acquiring gain. In a study conducted by two Yale professors, Keith Chen, an economist (who also teaches a course on negotiating strategy), and Laurie Santos, a psychologist, capuchin monkeys were taught how to use money—in this case, metal tokens which could be used as a medium of exchange.
In one experiment, monkeys were given the option to buy one grape, with a 50/50 chance of receiving a second grape. For the same amount of money, monkeys were given another option of buying two grapes, but would face a 50/50 chance of losing one of them. The odds and cost were identical for each option, but most monkeys went with the first option, not the second, demonstrating that they were much more interested in avoiding loss than maximizing gain.
This perhaps bears out what mediators see often in their practice—that a powerful motivation to settle can be the strong desire to minimize or avoid loss. The certainty that a negotiated settlement affords is often far more attractive than the risk of litigation.
But mediation provides more than the opportunity to avoid loss. What is compelling about mediation is its potential to enable disputants to maximize gain as well. If we are hard-wired, as these studies suggest, to prefer loss avoidance over the maximization of returns, to what extent does this propensity blind disputants to opportunities to maximize mutual gain? And what can mediators do to help disputants overcome these deeply ingrained tendencies to ensure that not only do disputants successfully minimize risk but at the same time, too, pull out all the stops on achieving the greatest gain possible?
To learn more about Chen’s and Santos’s studies (which records what is probably the first scientifically documented case of monkey sex for hire), read this hilarious article from Freakonomics.com, which describes not only the research on risk aversion, but also an experiment on cooperation which reveals how monkeys deal with their uncooperative peers.