(Money Magazine) -- Whenever you mix extended family, financial outlays, forced jollity, and alcohol, you're risking trouble. Economics carries some lessons about how to prevent seasonal squabbles from reaching epic proportions.
Redefine how conflicts are perceived. Fights with family members get especially heated now because they're often part of a broader power struggle about who's boss. As economics Nobel laureate Thomas Schelling has shown in his work on collective bargaining, such conflicts can be defused by making it easier for everyone to give in this one time. Announce that the holidays are different: Compromising at this time of year will not set the precedent that someone will be expected to cave regularly in the future.
Rely on trade and property rights -- two of the most central ideas in economics -- if people still aren't on the same page. Hold a family forum and swap for decision rights: You agree to control the tree decorations, for example, and your spouse gets to decide who is mailed a holiday card. Once control has been assigned to someone else, butt out.
Accept judiciously. During the holidays, you're bombarded with requests for favors ("Can you pick up the turkey for Aunt Jenny?") and invitations to events (your second cousin's Chrismukkah open house). Behavioral economists use the phrase "intransitivity of indifference" to describe what you're faced with. Accepting a few of the requests won't bother you, but if you accede to them all you'll be miserable. And a miserable person at Christmas dinner isn't exactly a recipe for family harmony. Say no -- and smile.
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