Rational Negotiating
As dispute resolution is a critical component of insurance practices, I must note research concerning the "neuroeconomics" of negotiating. The research, by a Harvard University professor, was reported in the July 7, 2007 edition of The Economist. The professor correlated negotiation patterns against testosterone levels. The report, as summarize in The Economist, concluded that "what people really strive for is relative rather than absolute prosperity. They would rather accept less themselves than see a rival get ahead." Thus, negotiating behavior that is often thought to be irrational, is in fact "differently rational" in that the negotiator is often pursuing social status, not money. This conclusion also suggests a larger lesson: when the other side in a negotiation seems to be acting against it's best interest, pause before dismissing the other side as irrational. It may be that you are misperceiving the other side's primary objective.
