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Tag Archive | "Behavioral Economics"

The Strategy of Being Nice

Robert Axelrod‘s Work (The iterated prisoners dilemma):

  • Be nice – this means don’t be the first to take advantage of someone’s vulnerability or an opportunity that changes the status quo to the detriment of everyone else (assuming everyone else has roughly the same status as you).
  • When you draw a line, enforce it. Be ready to put your money where your mouth is. This includes punishing those who fail to be Nice not just to you but to others.
  • You must be Just/fair. In this instance it means being forgiving. When you have punished and the price for the betrayal or transaction has been paid, be able to move on and rebuild relationships.
  • Some measure of openness. Be sure people know how and why certain actions will influence your own actions. This does not only refer to punishment, but also to negotiations and cooperation.

Working closely with my father, I wondered why he is such a trusting person. Given his experiences in business and how many have taken advantage of him, I find it strange that he is not in grievous debt – or very cynical. Getting into Game Theory opened up the perspective allowing me to analyze the advantages of his behavioral pattern (strategy).

In the bullet points above, the attributes provided by Robert Axlerod are general guidelines to be Fair and to be Nice.

Chapter 4: Cost of Social Norms from Predictably Irrational by Dan Ariely adds another dimension to Strategic Niceness.

Being nice is an Investment in Good “Faith” that you will be treated the same way. It is a strategy that cannot be easily quantified or broken down to rates of returns. Behavior is very much circumstance driven because environment and history of temperament are factors that are hard to account for in such assessment.

We begin being nice by being courteous and amiable, ignoring small transgressions (giving the benefit of the doubt until being able to draw a reasonable conclusion). A lot of being Nice is being receptive and being patient with the information you have gleaned when there is enough to act on either building a relationship or establishing that person is not trust worthy and merit avoidance – or giving punishment for abuses of good will.

Being receptive doesn’t mean being anyone’s fool. It doesn’t mean habitually leaving oneself vulnerable to abuse, nor does it mean letting people walk all over you. Part of being nice is being honest enough to communicate how much you are willing contribute, with the skepticism that the other party should meet you halfway. Drawing a line and communicating certain expectations doesn’t stop one from being nice. In fact, it becomes a selfish breach of social norm to prevent the other from taking reasonable measures for themselves against deception.

Now acting nice because you want to be treated well in exchange may seem draconian to some. It only seems that way with the pervasive conditioning of Entitled Selfishness. Some people expect people to be Nice or Good for its own sake. It is these people who find themselves entitled to be treated fairly and well, and who are more likely to violate the social norms that govern common courtesy and more serious matters like costly exchanges.

In the studies cited in Dan Ariely’s work regarding the chapter on Honesty and Character, preventing the temptation to be abused or deceived is an important aspect of honest relations, even when these safeguards are not tested.

In the end being a Nice Person has a time and place. Often, those of us who are habitually this way forget that there are times and places that call for us to be something else: firm, confident, certain, suspicious, careful, etc. This flexibility does not stop us from still considering ourselves “Good People”.

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