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NancyLebovitz comments on Offense versus harm minimization - Less Wrong
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Do you have strategies for distinguishing between game theoretic exaggeration of offense vs. natural offense?
The question is better phrased by asking what will be the practical consequences of treating an offense as legitimate and ceasing the offending action (and perhaps also apologizing) versus treating it as illegitimate and standing your ground (and perhaps even escalating). Clearly, this is a difficult question of great practical value in life, and like every such question, it's impossible to give a simple and universally applicable answer. (And of course, even if you know the answer in some concrete situation, you'll need extraordinary composure and self-control to apply it if it's contrary to your instinctive reaction.)
I don't see the distinction you're trying to make.
Tentatively-- game theoretic exaggeration of offense will simply be followed by more and more demands. Natural offense is about a desire that can be satiated.
However, there's another sort of breakdown of negotiations that just occurred to me. If A asks for less than they want because they think that's all they can get and/or they're trying to do a utilitarian calculation, they aren't going to be happy even if they get it. This means they're likely to push for more even if they get it, and then they start looking like a utility monster.
What do you mean by "satiated"?
From a utilitarian/consequentialist point of view, a desire being "satiated" simply means that the marginal utility gains from pursuing it further are less than opportunity cost of however much effort it takes.
Note that by this definition when a desire is satiated depends on how easy it is to pursue.
If you're hungry you might feel as though you could just keep eating and eating. However, if enough food is available, you'll stop and hit a point where more food would make you feel worse instead of better. You'll get hungry again, but part of the cycle includes satiation. For purposes of discussion, I'm talking about most people here, not those with eating disorders or unusual metabolisms that affect their ability to feel satiety.
I think most people have a limit on their desire for status, though that might be more like the situation you describe. Few would turn down a chance to be the world's Dictator for Life, but they've hit a point where trying for more status than they've got seems like too much trouble.