> our lack of knowledge about the circumstances can lead us to commit the fundamental attribution error. Are they "stupid" or are there circumstances of which we're unaware?
Such circumstances also depend on the timeframe of the people involved. One person might have a 30-day perspective, another person is thinking about the grandchildren.
The HISB-square looks a lot like the Win-win(intelligent), Win-lose(bandit), Lose-win(helpless), and Lose-lose(stupid) grid of negotiation theory. The time when Win-lose is a valid strategy is when there's no ongoing relationship between the two parties, e.g. bargaining for goods in a no-refunds market. The whole idea of commodity/stock/etc exchanges is built around this concept. When some bandit pulls a Win-lose when there's an ongoing relationship, it's easy for the helpless loser to turn a Win-lose into a Lose-lose situation. It might look like revenge, but it could be to establish a track record for their next negotiation.
Besides timeframe, such circumstances depend on information available. There's many bandits around who hide their true identity, and pose as intelligent for appearances sake, but are pulling some nasty banditry behind the scenes. I'd suggest a counter-rule to rule 1:
Always and inevitably everyone overestimates
the number of intelligent individuals in circulation.
The intelligent-posing bandits in that situation call the helpless losers who swung a win-lose into a lose-lose "stupid". After many such incidents, the helpless tend to always assume they're dealing with a bandit, even though the other person may be intelligent. These are school playground lessons.
So I'd propose a second corrolary to the fifth rule's first corrolary (i.e A stupid person is more dangerous than a bandit):
Stupid people become stupid because bandits pose as intelligent.