We've all seen examples where people make logically "dumb" decisions, and I have always used the "people are strange" explanation. Sure, there are aspects of fear and irrationality in nearly everything we do, but you always hope that logic wins out in the end. That may not be the case, based on a recent Business Week article, Why Logic Often Takes A Backseat: The study of neuroeconomics may topple the notion of rational decision-making
The National Hockey League and its players wrangle over a salary cap. The impasse causes the season to be canceled. Everybody loses. What went wrong?
According to the new science of neuroeconomics, the explanation might lie inside the brains of the negotiators. Not in the prefrontal cortex, where people rationally weigh pros and cons, but deep inside, where powerful emotions arise. Brain scans show that when people feel they're being treated unfairly, a small area called the anterior insula lights up, engendering the same disgust that people get from, say, smelling a skunk. That overwhelms the deliberations of the prefrontal cortex. With primitive brain functions so powerful, it's no wonder that economic transactions often go awry. "In some ways, modern economic life for humans is like a monkey driving a car," says Colin F. Camerer, an economist at California Institute of Technology.
Steven Covey talks about emotional intelligence (EQ), which encompasses both understanding your own emotions and those of others -- and how emotional responses affect your dealings in life. (Nice explanation of EQ at businessballs.) Dale Carnegie talks about this in a practical sense in his How to Win Friends and Influence People. In negotiations and conversations with people, get them on a positive footing from the beginning. Get them saying, "Yes, Yes." As the article on neuroeconomics suggests, something happens in the brains of people who feed negativity, and this influences their decision making capabilities. If you can start with positives, even when you don't seem to agree, you have a better chance at a positive outcome. Another principle here is to look for common ground - the ground from which you can start that positive conversation.
Update: corrected link to businessballs