Nir Halevy: How Do You Resolve a Conflict?

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Nir Halevy: How Do You Resolve a Conflict?

A professor of organizational behavior looks to game theory to better understand how to manage disputes in politics, business, and everywhere else.
MBA students collaborating on project
Leaders who hire employees who can sustain cooperative environments, they'll spend less on conflict resolution and management.

Like most natives of Israel, Nir Halevy knows something about conflict. As a doctoral student doing research at the Hebrew University of Jerusalem, he learned even more by observing patterns in the ways different groups of Israeli Jews thought about the Israeli-Palestinian conflict. Whether the opposing groups view the negotiations as one of mutual cooperation or possess a winner-take-all mentality makes a profound difference on the outcome.

Halevy's research shows that ordinary people describing a range of real-world disputes, including the Israeli-Palestinian conflict, use models studied by game theorists, economists, political scientists, and others. These include the "Chicken" and "Prisoner's Dilemma" approaches, which tend to be characterized by mutual competition, and "Assurance" and "Maximizing Difference," which focus more on mutual cooperation. (See the definitions.)

In an interview, Halevy discussed how this research with colleagues applies to conflicts in business, politics, and everywhere people butt heads.

In your 2012 paper, you report that out of hundreds of possible ways to characterize conflicts, 70% or more people classified all the situations they were shown into these four games. Why do only a few games show up again and again?

My coauthors and I think people make strong assumptions about conflict situations. One strong assumption is they stand to benefit more if their counterpart cooperates rather than competes. Once you establish that that's how people see the world, that eliminates a lot of the possibilities.

Another strong assumption people make is that unless there's specific information to the contrary, people tend to assume that things that are important to them are also important to their counterpart. That's why we have the fixed-pie bias in negotiations: Most of the time you only know your half of the story, you know your priorities; you don't have the other party's information, so you make assumptions.

Do you mean people don't see negotiations as an opportunity to expand the size of the pie?

Yes, behavioral researchers since the mid-eighties have consistently shown that people enter negotiations assuming that their preferences and priorities are identical to their counterparts' priorities. So one hurdle they need to get over is to make trade-offs, and without realizing that there are differences in priorities and preferences you can't do that.

Not surprisingly, we find that people who think of their conflicts and negotiations as games of Chicken or Prisoner's Dilemma also tend to subscribe to fixed-pie bias in negotiations, which is not the case for people who think they're playing Assurance or Maximizing Difference.

How does having different perceptions of the conflict complicate the picture?

One problem is within your own team or group. The fact that within one group people see the same situation differently makes it hard for the group's leader to coordinate a strategy that would be acceptable or ratifiable by everyone in their constituency: If some people say it's Chicken and others say it's Assurance, that matters in whether we're going to engage in brinksmanship or try to make concessions and build trust.

You also have the same problem across the negotiation table. I think it's critical for both parties to converge on the same view of the conflict. Different games have different rules, so if different parties think they're playing different games they will keep pushing for different types of settlement. For example, if you want mutual cooperation, the first step would be to convince the other party that you're playing a game of Assurance or a game of Maximizing Difference, and then they'll see the value of mutual cooperation.

What's an example of how a business leader might apply this insight?

Leaders exert disproportionate influence for how their followers see the game. One example I use in my teaching is a video of Herb Kelleher, founder and former CEO of Southwest Airlines, where Kelleher talks about competition with United. He talks about outright war — that United has warplanes armed and ready to fly against Southwest. He's saying United is truly Goliath and we're David.

Like most people, Herb Kelleher is telling stories — he's not describing games. But if we were to give him a matrix to fill out, he'd fill it in in a way that matches Prisoner's Dilemma or Chicken rather than the others, because his metaphor is the fierce competition of war. This way he's influencing his employees' view of the conflict: He presents it as a clearly competitive situation so employees can exclude Assurance and Maximizing Difference as relevant games.

Do people get a better negotiation outcome when they agree on what game they are playing?

Not necessarily a better outcome for themselves, but the process of conflict management will be easier once you've established what the game is. The head-on collision is the disastrous outcome in Chicken, and you want to avoid that at all costs, so you're willing to concede unilaterally. But if it's a game of Prisoner's Dilemma, you avoid your worst outcome by making sure you're not exploited unilaterally, so you want to defect [compete] to protect yourself. The logic in the two games is very different: To avoid your worst outcome in Chicken, you would concede, whereas in Prisoner's Dilemma you would defect. So there is not a direct link from the game you are playing to your outcome — your outcome depends on your strategy and the other person's strategy, but the game that you think you're playing influences what you think motivates your own competition, the other person's competition, and what you need to do to achieve your best outcome or avoid your worst outcome.

Is there an objective way to look at a situation and see what game describes it, or does it all depend on the players' perceptions?

That's a super-important question to which there's no definitive answer. Some say it's what most people would say the game is. So, if most leaders say that, in the situation in Iran or Syria, the international community is playing Chicken, then that's effectively the game. It's extremely difficult to find objective criteria.

Also, the game is potentially changing constantly. One example I use involves Kennedy vs. Khrushchev during the Cuban Missile Crisis. Kennedy was able to change the game from Chicken to Assurance with a blockade. The blockade and other things they did changed the nature of the game to make it less competitive, and that's what you want. To facilitate conflict management, you want to change the game from a more competitive to a more cooperative game.

It would be nice if everybody just knew that everybody wants to get along, and that would be the answer to all conflict — but there's always the chance that the other party will fail to cooperate, right?

In the forthcoming paper we report the results of surveys with thousands of employees, and we consistently find that people are more likely to agree with the statement, "I get the best outcome when we both behave cooperatively" than they are with "I get my best outcome when I behave competitively and they behave cooperatively." But we still have about 15% who say that they get the best outcome when they exploit the other person's cooperation unilaterally, and those 15% are driving a lot of the friction and conflict we see in organizations. In our longitudinal study, people who said "I get the best outcome by exploiting my counterpart" experienced the highest level of abusive supervision, hostility in the workplace, and workplace ostracism.

That raises the chicken-and-egg question: Maybe they have that attitude because they're in a horribly hostile environment.

We actually find that. We assessed people's beliefs about their strategies before the launch of the 12-week longitudinal study, we assessed how much mistreatment they encountered over the 12 weeks, and then we assessed their mental models of conflict a second time, after the 12 weeks. We find that, controlling for their beliefs before the study, their experiences of hostility in the workplace predict their beliefs at the end of the study. So, essentially, the game you think you're playing influences what you encounter in the workplace, and your experiences in the workplace, in turn, shape your subsequent beliefs about the game you're playing. So that could create a vicious cycle or a virtuous cycle.

Is that because in an organization you're usually interacting with the same people?

Exactly. There's always attrition and people move, but these are repeated games, so we were happy to show that one thing feeds the other. We also have an experiment in which we surveyed people and told them, "Imagine you're working with this colleague, and this tends to be their mental model of conflict. How likely would you do each of these things to them?" The items were things like ostracize, ignore, ridicule, yell at them. People said, "Yes, I would mistreat the colleague at work who has competitive beliefs." That tells us that it's not just the actors driving it: Their counterparts are perfectly fine saying this is how they will react to people with those kinds of games in their heads.

So what's the takeaway for employers and managers?

Employers and organizations can influence the level of counterproductive behaviors, such as abusive supervision and ostracism, in several ways. One is selection: If you can select employees who can sustain cooperative environments, you'll spend less on conflict resolution and management. The other way is socialization: You can potentially offset people's initial beliefs over time.

Conflict seems really complex, and some conflicts are just intractable. What would you say about those?

Even when conflicts are intractable, you want to be able to manage them better.
Nir Halevy, assistant professor of organizational behavior

Even when conflicts are intractable, you want to be able to manage them better. For example, choosing litigation is a costly way of handling conflict, and mediation is a less expensive way of handling the exact same conflict.

On top of that, although there may be a lot of uncertainty, you want to be prepared for various contingencies, so by staying ahead of the curve in your knowledge and thinking about these issues, you'll be able to handle situations without being surprised too often. For example, a supervisor might often have to handle conflict among subordinates. Having done that repeatedly and having the toolbox to manage conflict effectively ensures you don't have to spend a lot of time and effort on each individual conflict.

Four Views of a Conflict

Nir Halevy finds that most people see a wide range of conflict situations in one of four ways, depending on what they believe motivates competition and what they need to do to achieve the best possible outcome in the conflict. These views map to four classic games from game theory:

Chicken

If you view the conflict as a game of Chicken, you see competition as motivated by greed and believe your best outcome comes from forcing the other party to concede to your demands. You realize that mutual competition will give you your worst outcome, so you are willing to concede to avoid a head-on collision. Mutual cooperation would provide a good outcome for both parties, but not the best for you, so your desire to achieve your best outcome may lead you to push your opponent to the brink before you're willing to concede.

Assurance

Mutual cooperation gives both parties their best outcomes but requires high levels of trust to succeed. The incentive to cooperate is strong because mutual competition gives both parties a bad outcome. However, the parties may end up competing if they distrust the other or fear that party doesn't understand that mutual cooperation is in both parties' best interest.

Maximizing Difference

Both parties get their best outcome via mutual cooperation and their worst outcome via mutual competition, so the incentive to cooperate is strong. Tension occurs if one or both parties think the other one is motivated to get a better deal, relative to the other, rather than working towards his or her best outcome in absolute terms.

Prisoner's Dilemma

Represents the thorniest type of conflict because competition is motivated by all three considerations — greed, distrust, and the desire to maximize the relative difference vis-à -vis your counterpart. Your best outcome comes from competing while the other side cooperates (as in Chicken); your worst outcome comes from cooperating while the other party competes (as in Assurance). The dilemma is that, although competition makes sense for each party, mutual cooperation produces better outcomes for both than mutual competition does.

Nir Halevy is an assistant professor of organizational behavior at Stanford GSB.

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