Why do peacocks have impressive tails when they are heavy, burdensome and possibly life-threatening in their natural environments? Starlings chirp even more loudly as they approach danger, making predators aware of their location, but warning other starlings away. Likewise, why do folks like Bill Gates, Mark Zuckerberg and others drop out of leading universities that confer them with a market advantage even as they near completion, to start up their companies? According to Eyal Winter, these are both examples of the Handicap rule – they intentionally put themselves in scenarios of disadvantage precisely to signal to potential mates or investors that they have that extra constitution or intelligence to overcome what others consider shortcomings.
The outcomes of emotions often confuse us, especially in decision-making. They seem to defy logic and reason. Yet, the secretly hide some of the oldest and deepest logic behind them. Eyal Winter’s book, Feeling Smart: Why Our Emotions Are More Rational Than We Think (PublicAffairs, Dec 2014), unveils this logic through behavioral economics and game theory—how we behave when making decisions and choices on both
Dr. Winter is the Silverberg Professor of Economics at the Federmann Center for the Study of Rationality, Hebrew University of Jerusalem, as well as Professor of Economics at the University of Leicester, a noted researcher in applied game theory, behavioral and experimental economics. His book has impressive endorsements from five Nobel Laureates in Economics.
The book is an interesting drive through the plains and forests of game theory, explaining through storytelling, and directly relevant examples, ideas that would otherwise seem complex or purely academic. While game theory is often described in hypothetical scenarios and limited lab experiments, the author brings to life the concepts and explanation of the results, sometimes with deeply personal stories of his own past and from this family history. This is after all an explanation of emotions, and what is more emotional than some of the difficult moral and logical questions that people face directly.
The book begins with explaining how we make decisions and commitments under anger. In my prior post, I shared his explanation of one application of the Dictator game from game theory and how it creates short-term commitment more effectively than acting in calm or when you are happy. Getting angry gets results—it is contrary to what we want to believe when we have the luxury of time to make decisions. It moves through explanations of the variety of ways we demonstrate Trust, Generosity and Altruism. And finally, the last section on behavior like optimism, pessimism, arrogance, humility, overconfidence, risk-taking, and ending with herd behavior and team spirit. That is simply a quick run through of topics, but it is the details in the pages that are so compelling.
It is easy to cite research for some of the ideas in academia, but what makes this book different is that Dr. Winter brings his personal life stories with him. For example, he describes Stockholm syndrome – why some people can love those cruel to them – through the eyes of his own father who in 1932, the only Jewish student in a class with an enthusiastic Nazi supporting teacher that was both cruel and kind to him. He describes empathy through his expressionless Uncle Ezra, the stoic poker player who always seemed to win. He describes how we get sucked into collective emotions even when we violently disagree with them through the story Grand-uncle Walter, who regarded the Nazi regime as the embodiment of evil, while accidentally swept up in a Nazi march, found himself singing the words of their anthem and shouting “Seig Heil” as well—a traumatizing and apparently inexplicable reaction. Maybe you think he just has an interesting family, but the reality is that many people have or know an Uncle Ezra, Uncle Walter, or Hans Winter.
Peppered across the book are descriptions of outcomes of game experiments that bring out how we behave differently depending the context. For example, he describes an experiment that shows how Palestinians, Chinese, and Israelis all act differently in terms of generosity. Per the book:
My colleagues compared the behaviors of Israeli, Palestinian, and Chinese players in the experiment using the giving and taking games. Each pair of players always involved players from the same culture. Israelis gave relatively small amounts in the giving game, but took large amounts for themselves in the taking game. Palestinians gave relatively large amounts in the giving game but also took large amounts for themselves in the taking game. The Chinese players gave relatively small amounts in the giving game and also took small amounts for themselves in the taking game.
Palestinians…were very generous in the giving game while being selfish in the taking game. This hints that Palestinians emphasize nonmonetary considerations, such as expectations of reciprocity, in their decision-making. Their behavior was influenced by what they expected others to do…
The Chinese players showed a respect for property and a striving to avoid overly generous actions on the one hand and causing harm to others on the other hand. They gave in moderation and in turn took in moderation, preferring as much as possible to end the game with the same amount of money as they received at the start of the game.
In another example, he brings out other cross-cultural differences while describing the Ultimatum game,
In this game two players divide a sum of money, say $100, between them based on the following rule: the first player offers the second player a sum of money from the $100 (he can offer to give anything from $0 to the entire $100). If the second player accepts the offer, then the $100 is divided among the players according to the terms of the offer. If the offer is rejected, the experimenter takes away the $100 and both players walk away with nothing. The first player’s offer is in effect a “take it or leave it” ultimatum, explaining the game’s name.
One published research paper on the subject compared ultimatum game players in the United States, Japan, Slovenia, and Israel. The research study found significant differences between different cultures, whether players were in the role of proposers or responders. Players in Israel tended to propose the lowest offers for dividing the money. Japan was not far behind Israel, in second place in terms of the selfishness of the offers made by proposing players. Players in Slovenia and the United States were much more generous in their offers.
In both Israel and Japan responders tended to accept relatively low offers. But when similar offers were made by proposers in the United States, they were often summarily rejected by responders.
As I have described elsewhere, understanding these differences in cultures—whether because of where we live, the generation to which we belong, the norms of organization where we work, or our passions, or social networks—are essential to knowing how to work with or for others. The explanation of the ultimatum game gives credence to these differences. We can accept them or not, but we shouldn’t deny they exist.
There are a few shortcomings of the book. There is essentially a small set of games described, but many variations of them that result in radically different outcomes. I sometimes find myself lost trying to recall which variation is being discussed—the name of the game doesn’t change but the play does. Because it holds the need to understand the logic in such primacy, this same game name confusion stalled me at times and required re-reading it. On the other hand, other parts, particularly the stories, were very easy to comprehend and accept. (Incidentally, that is also indicative of my own cultural background). What this book requires is some work on your part to suspend, for the moment, your own cultural inclinations and biases—we all have them—to absorb the lessons even if they contradict your views.
There is an air of academia to the work, but there is a great deal more that you will learn about leadership and people management from reading this, than you might from trying to absorb Sun Tzu’s Art of War, or Miyamoto Musashi’s Book of Five Rings. On a more contemporary level, I would compare it to books such as Dan Ariely’s Predictably Irrational, or Malcolm Gladwell’s Blink.
The foundations of Feeling Smart are significantly more concrete and universal, yet absorbable and contextual. While you read this, you will find yourself reflection upon your own experience, or that of your organization or relationships around you, and that is what makes the book personal as well.
Rawn Shah is an independent analyst and consultant at Rising Edge. He frequently covers topics of collaboration and culture in organizations, and speaks on the topic at various events. He can be reached on Twitter, or LinkedIn.
