Over My Dead Body: Bargaining and the Price of Dignity

Concerns of pride, dignity and the desire to “keep hope” about future options often lead individuals and groups to walk away from reasonable offers, try to shift blame for failure onto others or take refuge in political utopias, leading to impasses and conflicts. Examples include trials, divorces, strikes, the scapegoating of minorities for economic hardships, and war. A key and puzzling aspect of these processes is the role played by wishful rationalizations and delusions, as attested by field observers (e.g., Truman F. Bewley (1999) in the context of labor relations, Kevin Woods, James Lacey and Williamson Murray (2006) in that of war) as well as controlled experiments. Leigh Thompson and George Loewenstein (1992) and Linda C. Babcock et al. (1995) thus demonstrate how subjects in bargaining situations with common knowledge spontaneously generate, through self-serving processing and recall of the same evidence, divergent beliefs about the fairness of their cause and wishful predictions of outcomes, and how these are associated to costly delays and disagreements.