People in a dispute often display puzzling reluctance to settle (compromise). Probably there are a number of submerged reasons for that. But one of them seems to be exposed by psychologists.
Various psychologists have several times run laboratory experiments known as “ultimatum games”. One player is offered a sum of money, payable if another player will agree to share it with the first player. It is up to the two players to see if they can agree on the split between them. If no deal is made, neither player will get anything. Every time the experiment is tried, roughly half the two-person teams cannot agree and so get nothing. Yet logically, any small share (beyond say a dollar or so) would be better than nothing. So ultimately one should take a cheap offer from the other player. In fact about half the players would not accept less than about one fifth. Yet the amounts involved were not just token or symbolic; they could be as high as one month’s salary.
This should interest lawyers, because this should be a win-win situation; it is not a zero-sum game, despite how about half the players seem to treat it. The exact situation sounds contrived, but an everyday lawsuit where the litigation expenses of the two antagonists threaten to eat up the amount in issue, is very similar.
The experiments are written up in Colin Camerer, Behavior Game Theory: Experiments in Strategic Interaction (Princeton U.P. 2003), pp. 42-81. I found an account of this in Sarah Chayes, Thieves of State (Norton N.Y. 2015) p. 44.
– Hon. J.E. Côté
The Commentaries are intended to call the attention of lawyers to promising or threatening developments in the law, in civil procedure, in developing their skills, or simply to describe something curious, funny or intriguing.
Justice Côté recently retired from the Court of Appeal of Alberta and currently acts as an arbitrator, mediator, or referee under Rules 6.44 and 6.45 of the Alberta Rules of Court.