Win-win and economics

In my last post, I had discussed the idea of win-win. I think that it's a spectacular guide, but one which many people might "understand too quickly" - that is everyone feels they have a good grasp of it, but might actually not consider its implications. I certainly don't claim to have the inside track on it. But I did recently run across an idea that might reframe what win-win can mean.

In the book The Economic Rationalist, Robert H. Frank discusses what the right decision is for someone who is facing a situation where they need to share costs in order to get a benefit. The situation he describes is that there is a person who has a garden that is being plagued by rabbits. The rabbits live in some woods nearby that are owned by a neighbor. A fence would need to be erected between the properties in order to keep the rabbits out of the garden.

It would seem the fair thing to do would be to split the difference on the fence. But the economic solution took fairness out of the equation and looked exclusively at the benefit of the fence. If the fence provided enough of a benefit for the person with the garden, they should spring for the whole thing.

To me, that doesn't necessarily mean we shouldn't approach our neighbor with an offer of splitting the difference. But looking at benefit can be a way to not get caught up in fairness, which can put blinders on us. We naturally see things from our own perspective (see the fundamental attribution error). Benefit can be a different focus for us to use, and not necessarily just to try to always win out. I mentioned in my last post the idea that we should work to get people to want to interact with us more. That might be a reason to go ahead and split the difference on the fence, even though it's your neighbors garden. The ongoing positive relationship has value. The best case scenario, to me, is where we would be so creative and productive that what we offer is always seen as a benefit, so that people naturally want to be reciprocal.

Aaron