I've been re-reading Chris Voss's Never Split the Difference, and the bit on the ultimatum game has stuck with me.
The game itself is simple: one person is given $10 that they must split with another person in whole-dollar amounts. The other can accept or reject. However, if they reject, both get nothing. Classical game theory says the “rational” offer is $1, as it is better for the offeree than getting nothing, so they should accept the offer. From the offeror's perspective, then, anything more than $1 just leaves money on the table.
However, in practice, as we have all seen, people constantly reject low offers even where there is a rational base for the offer. Not because they are bad at maths, but because they are weighing the money against something else. That something else is the cost of accepting a deal that feels, to them, unfair.
In practice, the calculus seems to shift as the stakes get bigger. Offer $1 out of $10 and people will often walk on principle. However, offer $50,000 out of $500,000 (the same 10% split) and that same “insult” somehow feels a lot easier to live with. Fairness doesn't disappear; the size of the number just starts to outweigh it, once it's large enough to matter.
In my experience in mediations, an argument about rationality versus fairness rarely moves a party. More often, what moves them, is a number significant enough, or life-changing enough, to outweigh whatever still feels unresolved about the fairness of the deal. Which might be why you can walk a party through the merits for hours without shifting them, and then a single number does the work instead.
So maybe the question, next time you're structuring an offer at mediation, is not only: “is this defensible?” Perhaps ask, too, whether it's large enough to change what the other side is actually weighing it against.
