In response to last week's article on how we demand fairness, a reader wanted to know how escalation of economic and social conflicts (leading to business loss and divorce) are consistent with our desire for fairness. That is, can behavioural psychology explain why we retaliate?

Take this example. We don't know or see each other. I am given Rs 10, 000 and asked to split the cash with you. I give you Rs. 4,500 and keep the balance. In another scenario, you are given Rs 10,000 and I take Rs. 3,000 from you. Which would evoke stronger reaction from you: receiving only Rs 4,500 or parting with Rs 3,000?

You are economically better off when I take Rs 3,000 (leaving you with Rs 7,000) than when you receive Rs 4,500 from me. Yet, your reaction is most likely to be stronger when I take cash from you. Why?

Asymmetric reciprocity

You may perceive my act of giving Rs 4,500 as generous while you consider my act of taking Rs. 3,000 from you as selfish. And our reaction is typically stronger towards perceived selfishness than towards perceived generosity. This reaction comes from our desire for fairness. Call it asymmetric reciprocity, if you will.

This happens because we typically try to read intentions behind the action. And because we do not always know the other person or have enough information behind the outcome, we deem the act of taking as selfish.

If this game were to continue with roles reversed (you give money and take some from me), you will retaliate by being less generous with me. And then I would give back, punishing you even more and so it goes on. Transport this logic to the games we play in real life and you will understand why conflicts escalate.

Thus, a seemingly harmless business email can result the in loss of a million dollar contract or careless remarks by a powerful person on TV can lead to social unrest in a country.

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