The Indecisive Arbitrator (And His Cognitive Biases)

The Indecisive ArbitratorMy father has a running joke about being indecisive.  “Do you have trouble making up your mind?” The answer:  “Well, yes and no.” Indecisiveness is actually a good quality in an arbitrator.  It is another way of saying, “keeping an open mind until the end.”

When I was a teenager, I spent a few days one summer hanging around a courthouse, sitting through a murder trial.  The DA questioned a witness, and I thought, “That makes sense.” The defense attorney then cross-examined the witness, and I thought, “Wow, that makes sense too.” After the prosecution rested, the same pattern occurred with the defense.  By the closing arguments I had reacted against both lawyers and witnesses with a sense of deep suspicion. I assumed they were all lying or at best stretching the truth.  Yet if I were the decision maker, how would I have made a decision?

It could not be based on sincerity.  When I was learning to be a mediator, one of my mentors told me, “The parties have repeated their story to themselves so often they really believe it. They may be lying even to themselves.  Sincerity doesn’t mean much.”

It could not even be based on the “truth” about what happened.  In college I took a difficult historiography class. We looked at one particular historical incident each week by reading five books describing it from five different perspectives. It was like Rashomon with footnotes. The historian’s perspective: there is no truth, only a series of facts that we piece together into a story based on our biases.

Judges and arbitrators talk a lot about cognitive biases.  Some of the major biases are fundamental attribution error, or the tendency to assume that someone else’s problem represents a failure of character tainting everything else a person does, but one’s own success is the result of personal effort; anchoring bias, or the tendency to “anchor” a decision on one piece of information; backfire effect, where one reacts to information that is inconsistent with a developing hypothesis by strengthening belief rather than questioning it; belief bias, where one accepts the conclusions of logic based on a non-rational belief as to the plausibility of the outcome (one objection to Bayesian statistics!); confirmation bias, or the tendency to accept only information that confirms one’s existing beliefs; hindsight bias, or “I knew it” (or from the arbitrator’s perspective, “You should have known it”); and my favorite, bias blind spot, or the dangerous belief that one is less biased than others.

One bias that all arbitrators must keep in mind for every case is called the framing effect, or the tendency to draw different conclusions from the same information depending on who presents it and how it is presented.  We must constantly evaluate the credibility of the source.  If a source we do not trust tells us information that sounds truthful, or if a source we do trust tells us information that sounds untruthful, we should be careful how we weigh it.

Have you ever seen a pachinko machine, the Japanese version of pinball?  That is what an arbitrator’s decision making process is like.  Facts and arguments come in, bounce off biases and piles of other balls and come out at the bottom, when we tally the score.  The skillful advocate will be able to play to the arbitrator’s biases or help him try to get the pachinko balls past them.  The skillful arbitrator will remain indecisive and let the balls fall where gravity leads them.

Cognitive Bias in Arbitration: The Backfire Effect

arbitration backfirePeople tend to process information through some of the same filters over and over again. We call these filters “cognitive biases.” They are hardwired into our brains.

One of these biases is called the “Backfire Effect.” People look for patterns in evidence so the world does not become a string of disconnected observations. As we are starting to piece together a pattern, or develop a hypothesis, one might think that a rational person would reconsider the hypothesis when faced with an inconsistent fact. It actually takes an extra cognitive step to approach the world that way, since our tendency is to strengthen the developing hypothesis in the face of the inconvenient evidence. Our minds value seeing some pattern over the chaos of having no pattern.

In an arbitration, the arbitrator may experience the backfire effect without even realizing it. Every decision has two elements, determining (i) what actually happened and (ii) whether the fact pattern fits into an intellectual construct of whether to make an award for the plaintiff (whether that construct is legal, course of dealing or fairness depends on the type of tribunal).  As the complainant begins her case, she draws an image of the events that led to the conflict. Her counsel then fits the developing image into the developing pattern of the argument for an award.If it is well-drawn, the arbitrator who is not careful will begin to buy into it subconsciously in order to make sense of all the data. When the defense begins to present its case, it may be fighting an uphill battle not only to dislodge the plaintiff’s version of the story and legal claim, but maybe even to battle against a subconscious tendency to reject inconsistent evidence, laced with the secret emotionality that goes along with the backfire effect. Arbitrators, who like judges tend to be a rational bunch, are not always sensitive to non-rational tags that become attached to developing patterns.

As an arbitrator, be aware of the backfire effect. As a party or advocate, use it. The early part of the complainant’s case is critical. The pattern is drawn in the opening statement, then those first bits of evidence must layer over each other as cleanly as possible to set the stage. Think of the presentation as a house of cards, with the evidence as credibly as possible built on itself to tie together a story that the arbitrator has to work to step away from when the other party has its turn. For the other party, the best way to undermine the backfire effect is to damage the credibility of the complainant’s very first bits of evidence presented and the way complainant’s story fits together, so the arbitrator has conscious doubts over the intellectual construct he is developing.  If the complainant’s story has not fully taken hold, it leaves space for the respondent to develop its story.

The backfire effect: be aware of it.  Use it.

Cognitive Bias in Mediation: Fundamental Attribution Error

Massachusetts family mediationPeople tend to process information through some of the same filters over and over again. We call these filters “cognitive biases.” They are hardwired into our brains.

One particularly strong bias is called “fundamental attribution error.” When something good happens, we tend to overestimate the role of our own effort and intention. For instance, a store manager might say, “The changes I made helped us make more money last year,” even though it happened at the time the whole industry was expanding. On the other hand, when something bad happens, we are tempted to assign moral blame.  For instance, in a family mediation in which one party has experienced an injury or illness, the other party will often say, “I know she got hurt, but she really could be fine now if she worked harder at it.” In other words, people do have a subconscious tendency to congratulate themselves and blame the alleged victim.

Both sides of the fundamental attribution error coin come up often in business and family mediation. The mediator first has to decide if it is a barrier to resolution, creating significant difficulties on one or both sides, or if he can safely ignore it. If it is a barrier, he has many options.  He can engage in reality testing, although he should read the parties carefully to be ready to address any explosive pushback if emotions run high. He canhold up a mirror to the party most entrenched or float the fairness bubble.  His goal is to see if the parties’ perspective can be shifted so they can get past the issue.

For the parties, fundamental attribution error can be offensive. People do not like listening to boastful language that implicitly or explicitly denigrates their role in positive developments. At the same time, people do not like listening tolanguage thatimplicitly or explicitly blames them, often by laziness, for not escaping externally imposed constraints. As a party, one can spin the language to increase or decrease the other party’s perception of one’s fundamental attribution error to increase or decrease the other party’s annoyance.  Annoyance often stands in the way of resolution, but sometimes, if people are motivated by a desire to overcome the taint, it can be an impetus. The implicit message to which some parties respond is, “Prove to me you are capable.” Parties who are using the mediator to convey messages should be up front about their goals, since mediators sometimes filter out emotional content in order to keep the focus on the elements of resolution.

Fundamental attribution error: acknowledge its presence, then choose to use it or try to bypass it.

Cognitive Bias in Mediation: The Backfire Effect

backfirePeople tend to process information through some of the same filters over and over again.  We call these filters “cognitive biases.” They are hardwired into our brains.

One of these biases is called the “Backfire Effect.” People look for patterns in evidence so the world does not become a string of disconnected observations.  As we are starting to piece together a pattern, or develop a hypothesis, one might think that a rational person would reconsider the hypothesis when faced with an inconsistent fact.  It actually takes an extra cognitive step to approach the world that way, since our tendency is to strengthen the developing hypothesis in the face of the inconvenient evidence.  Our minds value seeing some pattern over the chaos of having no pattern.

In a mediation or negotiation, the backfire effect works against resolution.  Consider a breach of contract dispute.  One party may be moving toward a view that the other’s non-performance was part of an intentional plan.  The non-performing party may have a series of objectively valid reasons for non-performance – or, at least, reasons it sees as objectively valid.  It therefore views the other party’s refusal to accept the explanation as being irrational and overreaching.  There can be many currents and counter currents going on, but one of them is probably the backfire effect: over the course of the dispute, the party claiming breach has become increasingly strident in rejecting each of the reasons for non-performance, viewing each as increasingly desperate attempt to avoid responsibility rather than part of the true picture of events.  The non-performing party starts from the presumption that events excuse its performance and increasingly digs its heels in as the other side rejects its clear factual narrative.  As each party cements its position, legal rights become irrelevant.

When the backfire effect kicks in, one of the mediator’s jobs is to separate the story from the resolution and sidestep the effect.  The role of this particular cognitive bias is to maintain a developing narrative, but if the mediator can de-emphasize the narrative – especially in a commercial case – it frees each party to focus on what the best resolution for it may be under the circumstance.Whether that involves “narrative” mediation techniques or more traditional bargaining is part of the art of the mediator!

Advocates can use some cognitive biases to “spin” the mediator.  However, they do not often have luck with the backfire effect, since mediators generally have a high tolerance for chaos and do not become as invested in their clients’ story as an advocate might.  On the other hand, by positioning their story properly, they may be able to use the mediator as a translator to avoid exacerbating the backfire effect by the other party or parties.  If uncomfortable information is filtered through the mediator, it may receive less push back.

Cognitive Bias in Arbitration: Fundamental Attribution Error

People tend to process information through some of the same filters over and over again. We call these filters “cognitive biases.” They are hardwired into our brains.

One of these biases is called “fundamental attribution error.” When something good happens, we tend to overestimate the role of our own effort and intention. For instance, a store manager might say, “The changes I made helped us make more money last year,” even though it happened at the time the whole industry was expanding. On the other hand, when something bad happens, we are tempted to assign blame.  For instance, “I know his job was cut when the company was downsizing, but if he had put more effort in, they would have kept him and let someone else go.” In other words, even though people may think they root for the underdog, they actually have a tendency to congratulate themselves and blame the alleged victim.

Judges gavel on a pile of law booksIn a contested matter, the complainant has been unhappy enough with the outcome of a situation to makea claim.  At some level, the arbitrator must be careful not to have a bias toward blaming the alleged victim or respond to his bias by overcompensating in favor of the alleged victim.  Similarly, he must be careful not to have a bias toward crediting success solely to the effort and general superiority of the party claiming success (although he may need to acknowledge that success in weighing the evidence). He must be conscious of how he is responding at a subconscious level.

The advocate in arbitration can use cognitive biases in her favor by how she spins the story she tells.  For instance, defendant’s counsel can present evidence of the many ways the plaintiff failed to take action to prevent or ameliorate the harm. While the advocate runs the risk of alienating an arbitrator by reiterating evidence too much, she should certainly try to reinforce the arbitrator’s subtle predilection toward assuming fault (and even character flaw).  Likewise, plaintiff’s advocate should consider ways to weaken the other side’s subtle claims of moral superiority. Counsel should plant the seeds of the dark side of a successful defendant’s story, as if defendant were a baseball player who was viewed as a hero because of his prowess on the field until the public learned about his secret steroid use.

While fundamental attribution error comes up more often as an obstacle to mediated resolution, the attentive advocate can also use it to help be persuasive in arbitration.