The dyadic utility space and the interaction – utility matrix: how individual goal-setting determines realizable utilities in dyadic relations

Abstract

PurposeThe paper analyzes how the goal-setting of two individuals or social units A and B determines the utilities, which the two parties can gain in a dyadic interaction.Design/methodology/approachThe analysis is based on a dyadic utility space representing the utilities of A and B along the x and y axis, respectively. In this space the goal-orientation of an individual action is mapped with a vector, where its angle shows the combination of utilities of A and B aimed at, and the length corresponds to the strength of an action.FindingsAnalyzing actions of A and responses of B in the dyadic utility space allows (a) calculating single and joint utilities, (b) identifying the narrow range of equal utility for both and (c) identifying four vectors for maximizing different combinations of utility. Studying combinations of these four vectors in a 4 × 4 ‘Interaction - Utility Matrix’ shows how the goal-setting of A for a prime action widely predetermines, before a response of B, the realizable dyadic utility for both.Practical implicationsThe dyadic utility space allows illustrating any dyadic interaction: It shows all possible dyadic “payoffs” investigated in game theory; it allows studying repeated exchange and resulting accumulation of utility; it allows mapping power relations.Originality/valueThe paper shows the interrelation between cybernetic principles of control, goal-orientated human behavior and the utility concept of social sciences. And it allows rejecting Adam Smith’s 18th myth of an “invisible hand”.