A system for settlement

Daniel Kahneman, the winner of the Nobel Prize in economics, has authored a fascinating and important new book on a subject having little to do with economics but everything to do with decision-making ? "Thinking Fast and Slow." His work has enormously important implications for the process of decision making in the mediation environment.

Kahneman posits that human beings make decisions in two basic ways. First, using what he calls "System 1," which is the brain's lazy approach to life. Kahenmen argues that using System 1, we make decisions both intuitively and also based on heuristics, which are simple procedures that with little or no thought help us to find adequate but imperfect answers to difficult questions. His first example of system one thinking is this: What is 2 x 2? Without the need for any real analysis, anyone of a certain age knows that the answer is 4.

Kahneman's "System 2" is much different. To illustrate, he asks: what is 17 x 24? To find the solution to this question, System 2 comes into play ? the brain has to actually work because the answer is neither intuitive nor readily available from the application of some heuristic aid. However, Kahneman demonstrates in a convincing way that the lazy brain doesn't like to work, which is one of the reasons why so much of our decision-making process uses System 1 and not System 2.

Kahneman postulates that although we all believe that we go through life as rational, thoughtful human beings (meaning that we believe that we operate in System 2 mode most of the time), the reality is that System 1 controls most of our behavior. He suggests that there are many reasons for this, some psychological and some physiological (he cites one study where judges made more System 1 decisions and less System 2 decisions simply because they were hungry, because the brain is a huge consumer of energy and when there isn't enough glucose to feed the brain, it tends to shut down).

In Kahneman's analysis, System 1 thinking is particularly and perniciously susceptible to irrational outside influences, some of which I have discussed in earlier columns, such as confirmation bias (the tendency to focus on facts and arguments that support your position and resist contrary facts and arguments) and attribution bias (attributing "good" traits to your actions and "bad" traits to the actions of your opponents ? example: You are late to a mediation but it's excusable because there was an unforeseen traffic problem; your opponent is late for the same reason but you attribute his or her tardiness to the fact that your opponent is irresponsible and doesn't care about being on time). Kahneman believes that there are other powerful influences on System 1 thinking. He also suggests that we aren't consciously aware of most of these influences.

He provides some fascinating examples. In one experiment, some volunteers were told to put together sentences from scrambled words. For some volunteers the words included references to age and aging. Other volunteers did not see those words. All the volunteers were then told to walk to another room for another interview and the researchers kept track of the time that it took to walk to the second room. The volunteers who had been exposed to the "aging" references walked slower and took longer to reach the other room. He gave another example, an experiment done by the psychologist Solomon Asch, who presented words to describe two individuals, Alan and Ben, and then asked the readers for their opinion about the two people:

"Alan: intelligent ? industrious ? impulsive ? critical ?stubborn ? envious"

"Ben: envious ? stubborn ? critical ? impulsive ? industrious ?intelligent."

Most people viewed Alan more favorably than Ben (you may have reached the same result). However, if you take a closer look, you will see that the words used to describe both Alan and Ben are identical. The more favorable view of Alan is an example of System 1 thinking ? it's impressionistic, not analytical and hence extremely unreliable.

Additional examples demonstrate other influences on our System 1 thinking. Experiments shows that our System 1 thinking is greatly influenced by how things are said (a cold-cut described as "90% fat free" is more attractive than a cold cut described as "10% fat"), how words appear in print (words in an easily readable font and words that are repeated are more persuasive) and even the facial features of people impact our perception of their ability to perform well in elective office (an experiment showed that people with a square chin were deemed more trustworthy and "electable"). In all of the above examples, even a brief analysis (think "System 2") would negate these influences. A strong chin has little to do with the ability to govern (former President Warren G. Harding is the classic example of this). Ninety percent fat free is the same at 10 percent fat. And, words are just words, regardless of how easy or how difficult they are to read.

All of these examples demonstrate how subtle external influences govern our thinking and decision-making process in ways of which we are completely unaware. They also demonstrate how the "emotional" can overcome the "rational," behavior that is common in the mediation environment. In this regard, the following except from Kahneman's book truly resonated with me in the context of how people behave and make decisions in mediation:

"The great comedian Danny Kay had a line that has stayed with me since my adolescence. Speaking of a woman he dislikes, he says, 'Her favorite position is beside herself and her favorite sport is jumping to conclusions.' ... and now I believe it offers an apt description of how System 1 functions."

How many times do we find ourselves in mediation with parties (and lawyers) who are "beside themselves," meaning that their emotions are controlling their behavior? And how many times are we, as mediators, confronted with parties (and lawyers) who jump to conclusions ? the usual conclusion being an unequivocal: "We are going to win and they are going to lose," when a more rational (System 2) analysis would suggest that the outcome is far less certain.

Mediators in general are aware of the influence of unconscious effects on the decision-making process, and it's an issue that I have studied and thought about for years. However, it wasn't until reading Kahneman's book that I begin to see a more scientific analysis of the way in which our thought processes really work. And, how scary, really, it is to understand how these subtle and irrational matters can so substantially affect our ability to otherwise come to a rational decision.

So how can we apply some of the lessons that we learn from Kahneman? At a simple, but important level, you can be aware of the impact of Kahneman's System 1 and System 2 analysis, and ask yourself whether you are making decisions based on a rational, analytical approach, or whether you are "winging it" with System 1, with all the attendant danger of using that system to make important decision. You can be aware that basic physiological concerns influence your decisions ? when you are too tired or too hungry, it affects your ability to be rational and analytical. You can use this information to better understand why your resistance to the suggestions of the neutral mediator might be the result of purely System 1 thinking and not a System 1 reaction that leads you to the conclusion that you are "right" and the mediator is "wrong." In this regard, one of the recurring themes in Kahneman's analysis is that the lazy, System 1 brain resists the effort of thinking things through ? its motto might be: "My mind is made up, don't confuse me with the facts." This may explain one of the mysteries of mediation, which is why so many lawyers and parties seem to pay so little attention to the mediator's careful, thoughtful and neutral analysis of the facts and law: the mediator thinks that he or she is talking to the rational and receptive System 2, but in reality, the mediator is talking to the brick wall of System 1.

With all this in mind, the next time you are looking to resolve a case at mediation, remember that there is a system that will help you get there ? it's System 2.