Reactive Devaluation

Category: Social

You rate a proposal as worse the moment you learn your opponent is the one offering it. Same terms, same numbers, different messenger, and suddenly the deal stinks.

How it works

The trick your head plays is treating the offer as data about the offer. When an opponent concedes something, you infer it must be worth less than you thought, otherwise why would they part with it? So the act of giving reduces the perceived value of the thing given. Naive realism feeds this: you assume your read of the situation is objectively correct, so anyone who disagrees is either misinformed or self-interested, and a self-interested rival's generosity looks like a trap. The cruel part is that this fires hardest exactly where it hurts most, in high-conflict negotiations between parties who distrust each other, which are the negotiations that most need a deal to close.

Where you'll see it

  • Lee Ross and Constance Stillinger surveyed Americans on a sweeping bilateral nuclear arms reduction plan. Attributed to Reagan, 90% called it favorable or even-handed. Attributed to a neutral analyst, about 80%. Attributed to Gorbachev, only 44%. The words never changed, only the name on top.
  • Maoz, Ward, Katz, and Ross (2002) showed Israeli Jews an actual Israeli-authored peace plan. When it was labeled as a Palestinian proposal, they rated it worse than when it carried its true Israeli authorship. Israeli hawks even devalued a plan attributed to their own dovish government, reading 'concession' as 'we are being played.'
  • Ross and colleagues studied Stanford's South Africa divestment debate. Students rated divestment proposals more highly while they were still hypothetical than after the administration actually adopted them. The moment a proposal becomes real and attributable, its shine drops.
  • Sales and salary negotiations run on this daily. The instant a vendor says yes to your price, you suspect you left money on the table and should have pushed harder. The concession you fought for feels cheap precisely because you won it.

Where it comes from

The concept was named by Lee Ross and Constance Stillinger at Stanford around 1988, out of research on why US-Soviet arms control talks stalled even when both sides seemed to want the same outcome. The core experiments circulated first as a Stanford working paper (Stillinger, Epelbaum, Keltner, and Ross, 1990) and were laid out for a general audience in Ross and Stillinger's 1991 Negotiation Journal article "Barriers to Conflict Resolution" and Ross's 1995 book chapter of the same theme. The most rigorous field test came in 2002 when Ifat Maoz, Andrew Ward, Michael Katz, and Lee Ross ran the effect on real Israeli and Palestinian peace proposals, published in the Journal of Conflict Resolution.

How to counter it

Blind the source before you judge the terms. Write down the exact proposal without the author's name, rate it, and only then reveal who sent it. If your score falls after the reveal, that gap is pure bias, and you should trust the blind rating.

Ask what you would pay if a neutral party offered this. Imagine an unbiased arbitrator or a mutual friend put the same terms on the table. If you would take it from them, the terms are fine and your problem is the messenger, not the deal.

Have the other side propose your own idea back to you. If you notice you reject anything they suggest, get a mediator or third party to float your preferred solution so it does not arrive stamped with the enemy's fingerprints. Reactive devaluation cuts both ways, so use it deliberately.

Separate the concession from the concessor's motive. When they give you something, resist the reflex that says "this must secretly help them." Price the item on its own merits against your alternatives (your BATNA), not on your theory of why they were willing to hand it over.

The tell

You catch yourself thinking "if they're offering this, there must be a catch" before you have found any actual catch. Or you feel a deal get less attractive the instant the other party agrees to it.

Related biases

References

  1. Lee Ross, Constance Stillinger (1991). Barriers to Conflict Resolution. Negotiation Journal, 7(4), 389-404
  2. Ifat Maoz, Andrew Ward, Michael Katz, Lee Ross (2002). Reactive Devaluation of an "Israeli" vs. "Palestinian" Peace Proposal. Journal of Conflict Resolution, 46(4), 515-546
  3. Lee Ross (1995). Reactive Devaluation in Negotiation and Conflict Resolution. In K. Arrow, R. Mnookin, L. Ross, A. Tversky, R. Wilson (Eds.), Barriers to Conflict Resolution (pp. 26-42). New York: W. W. Norton
  4. Constance Stillinger, Michael Epelbaum, Dacher Keltner, Lee Ross (1990). The Reactive Devaluation Barrier to Conflict Resolution. Unpublished manuscript, Stanford University