Game theory is often presented as a framework for making better, more rational decisions. I often find myself sitting down and trying to put aside my concerns and emotions and work out what the ‘correct’ most optimal response to a problem is. But while weighing the outcomes of the different options is valuable, there are often times where how I feel is just as important as how much the decisions cost. Sometimes it’s really important to me to do what seems right, what makes me happy, or what allows me to act upon my anger. We are taught that rationality means setting aside our emotions, and yet sometimes our emotions will prevail.
Not only do our emotions sometimes win over, but the way we feel has value to us. The cost of an act based on emotion can be quantified, at least within a specific case, based on what other options we are willing to forego.
Is it time to stop?
Consider for instance a situation where you are in a heated argument with a friend. You know that the conversation is leading to nowhere good, and fast. You can either break off the conversation or continue. Game theory would tell you that the further you argue, the more both of you are going to lose. Despite this, some will continue to argue. Perhaps there is something important that one feels needs to be said. Perhaps the argument is in itself the reason to damage the friendship. Or perhaps despite the desire to argue, to lash out, it is not worth the consequences. Whether one chooses to argue or not argue, it can be a rational choice. Is it worth more to vent, or is it worth more to not damage the friendship? It could also be an irrational choice, made without considering the consequences.
Let’s say your friend needs a loan for car repairs and their credit is shot. You know that there’s a chance they will never pay you back. You also know that you can get a better return on your investment elsewhere because it’s not socially acceptable to charge interest to your friends. Some people are going to offer the loan anyway. Partially because some friends and friendships are more reliable than others, but most likely because it’s a nice feeling to help someone out. At best, you lost unearned interest, at worst you lost the entire loan. A rational choice requires one to weigh these costs against the good feelings one may feel. An irrational choice is to assume the loan will be paid back, or to decide that because you can get a better return elsewhere, you should never help your friends.
Is it worth the trouble?
Say you’re working on a project and one of your team members has been slacking off or otherwise not putting in a full effort to get their part of the project is done. You do not have the skills necessary for this part of the project. The deadline is coming up and there’s a lot of work to do. Your choices in this hypothetical situation are:
Given only these two options, we all know which one is the ‘rational’ choice and yet, we also know that sometimes people choose the second option. And we have probably all been in a special situation in which taking the second option seemed more than appropriate. Your teammate might have a completely unacceptable reason for being distracted, may not have the greatest personality, or is making unreasonable demands. In other words, you could be really angry for a very good reason, making it very hard to be helpful and calm.
The consequences of failure may also vary. Your very job may depend on its success, or it may be an unnecessary favor you were attempting to make. One must consider the stakes and how much value there is in not having to pretend to be positive. It is perfectly rational to ask oneself whether it is worth the effort. What would not be rational is to always assist your teammate, ignoring your feelings, no matter how badly they may be behaving.
Do I want to shop here anymore?
A while back, I had returned a book to Amazon and thought there was an error in their calculations of what I was owed. They did eventually correct the error, but while I was waiting for their reply to my inquiry, it occurred to me that I save so much money using Amazon over any other alternative that not only would I continue to buy from them if they do not fix this mistake, but they would have to make enough mistakes to amount to hundreds of dollars worth of… dollars, time, and/or aggravation before I would be willing to stop doing business with them.
While game theory helps me quantify my choices, it did not affect my decision. Many people keep shopping at places that have made unfortunate customer service mistakes in the past or sold products that turned out undesirable. I think that I am more willing to walk away from a company than the average person, but it’s much easier when substitutes are readily available, such as bars and restaurants.
We value how we feel. That is why we avoid doing things that make us upset and try to do things that make us happy. If we are to make truly rational decisions, then we should factor in the emotional costs and benefits as well.
For a long time, I struggled to reconcile my emotional desires with game theory. I would often turn to game theory when my emotions clouded my judgment. I’d realize that while I’d like to vent my anger, it would have a price. While I would like to do the thing that is more pleasant, there would be a cost. Then I realized that things that make me happy or sad or angry are things that give me utility. How else do I measure my want of an item if not by how happy I think it will make me, or unhappy to do without? Wanting to avoid pain is far more sensible than wanting a book.
One may wonder if this is just an excuse for bad behavior. This is not the case. No matter how angry or upset I may be, the long-term benefits in terms of goals or reputation almost always outweighs the temporary desire to act upon an emotion. When the stakes are high, one can put aside pride or indignation.
But sometimes a different response is required. My happiness has a price. My ability to vent or cope with sadness has a price. My integrity has a (very high) price. Anyone who is not a doormat has a limit. What is important is to not act as agents devoid of emotion, but to know what price we must pay for the emotion we want.
Whatever you do, make sure you know what it will cost you.