Wednesday, January 22, 2014

Perceptions and Stories

Eric and Fran are in conflict.

They've always had a hard time working together, but lately the frustration and tension has spilled over to colleagues and family members on each side.

Fran catches you first, her story emerging in messy, manic detail. Eric, she claims, is acting unreasonably. He is incompetent and he is being childish.You know you are only hearing Fran's side of things, but still, you have a hard time imagining how Eric could explain his behaviour. It seems inexcusable, and you tell Fran she is right to be so upset.

Eric calls you later that day. He says he doesn't want to speak ill of Fran, but demands that you hear his version of what happened. You listen, as Eric describes what "really happened, " and you soon find yourself confused. Eric, it seems, is the real victim here. You try to resist the urge to take Eric's side, but give in: "you are right to be so upset, you tell him.

Moments later, you get an email from a mutual friend, who asks if you know anything about what is going on between Eric and Fran. " I've spoken to both of them," you write, and then realize that you simply haven't figured out how to reconcile what you've heard so far. You know both Fran and Eric well enough to know that neither is lying, or even intentionally shading the truth.And yet their descriptions of the dispute could not be more different.

The Brain as a Story-Based System

What's going on? Artificial intelligence researcher Roger Schank puts it well: "Human memory is story-based." Far from simply reflecting or recording reality, our minds engage in a complex interplay between what we perceive and what we already know, unconsciously adding and deleting information in the service of the story. Disputes occur when the stories we tell about what's happening-who's right,what's fair, who's to blame-diverge.Each side retreats to their own narrative which describes their experience of "reality," and the dispute intensifies.

Extracted from Heen & Stone" Perceptions and Stories"; The Negotiator's Fieldbook at p 343.

Thursday, January 16, 2014

Property Market

Almost weekly if not more frequently we are being made aware of surveys predicting rises in property prices  for 2014.

In today's Financial Review we are told that property is in for a bumper year, with higher prices, increased building and more jobs according to a new survey.

The bullish outlook, based on the views of 2500 property professionals, is apparently the strongest recorded in the four-year history of the Property Council-ANZ Property Confidence Index.

Property Council chief executive Peter Verwer said expectations of house-price growth and new housing construction were driving a strong increase in confidence.

ANZ head of property research Paul Braddick said momentum would continue into 2014.

More solid house-price growth is expected in 2014, led by Queensland.

Mr Braddick predicted the national median house price would rise around 6 per cent , with rises of up to 7.5 per cent in Sydney and Brisbane.

All sectors are expected to be positive.

It is expected that the upturn will flow through to the broader economy, through employment in construction, through increased stamp duties for government and from the wealth effect on consumer spending.

This excerpt is based on an article entitled "Housing bulls run rampant into 2014", in the property section of the AFR of 16 January 2014.