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REACTIVE DEVALUATIONIn Theory & Practice

Handouts

www.viaconflict.com“Reactive Devaluation: In Theory & Practice”

@ ACR 2014

The post links to a PDF of the Presentation

Reactive Devaluation: In Theory & Practice

Presented by M. Ryan O'Connell | ACR 2014 | www.viaconflict.com

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Objectives

What is Reactive Devaluation?

What influences Reactive Devaluation?

How do we manage Reactive Devaluation?

WHAT IS REACTIVE DEVALUATION?



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Defining Reactive Devaluation

“A proposal can look less desirable than it otherwise would merely because a counterpart offered it. This phenomenon is known as ‘Reactive Devaluation.’”

Reactive Devaluation ResearchUS-USSR Disarmament Proposal Study

The Experiment• 1986 sidewalk survey of a

nuclear disarmament proposal

• Participants were variously told that the same proposal was devised by the US, the USSR, or a group of neutral strategy analysts



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Reactive Devaluation ResearchUS-USSR Disarmament Proposal Study

The Results• 90% supported the proposal

when Reagan was the author• 80% supported the proposal

when the neutral strategy analysts were the author

• 44% supported the proposal when Gorbachev was the author

Talking Reactive Devaluation

“I have had a philosophy forsome time in regard to SALT,and it goes like this: TheRussians will not accept aSALT treaty that is not intheir best interests, and itseems to me that if it is intheir interests, it can’t be inour best interest.”

– U.S. Congressman Floyd Spence of South Carolina on the Strategic Arms Limitation Talks (SALT)



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“Reactive Devaluation in a negotiation refers to the fact that the very offer of a particular proposal or concession -especially if the offer comes from an adversary - may diminish its apparent value or attractiveness in the eyes of the recipient.”

Reactive Devaluation ResearchStanford University’s Divestment Proposal Study

The Experiment• Stanford University students were

asked to evaluate the magnitude of two proposals the university was considering for divesting of holdings in South African companies

• Students were told the university supported one of two plans or the university had not decided which plan to support



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Reactive Devaluation ResearchStanford University’s Divestment Proposal Study

The Results• The experiment supported the Reactive

Devaluation hypothesis not because Stanford was considered an adversary but because Stanford supported one plan and not the other

• Students consistently ranked the “non-offered” plan as a greater concession from the university in both surveys and experiments


“Please accept myresignation. I don’tcare to belong to anyclub that will have meas a member.”

- Groucho Marx's telegram to the Friar's Club of Beverly Hills to which he was a member



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Reactive Devaluation, “result[s] from the dynamics of the negotiation process itself,” and means “the evaluation of specific package deals and compromises may change when they are put on the table, especially if they have been offered or proposed by one’s adversary.”

Reactive Devaluation ResearchProfessor-Student Negotiation Study

The Experiment• Participants, who were

graduate students, were asked to review a scenario involving a dispute between a professor and a graduate student

• Participants then evaluated one of two offers made by the professor to resolve the dispute



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Reactive Devaluation ResearchProfessor-Student Negotiation Study

The Results• The experiment tied the

US/USSR survey and the Stanford survey/experiment together to show that Reactive Devaluation is not dependent on a adversary but increases in magnitude when the parties’ relationship is adversarial


“We should supportwhatever the enemyopposes and opposewhatever the enemysupports.”

- Chairman Mao



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The Three A’s of Reactive Devaluation

1. Adversarial Relationships: An option presented by an adversary is undesirable solely because it was presented by an adversary

2. Asymmetrical Interests: The default assumption often made in conflicts is that of asymmetrical interests

3. Availability of Options: The availability of an option affects that option’s desirability

Finding Reactive Devaluation



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WHAT INFLUENCES REACTIVE DEVALUATION?

Categories of Influence

Preference• Reactance

Theory• Aspirational

Level

Perspective• Fixed Pie Bias• Naive Realism

Protection• Loss Aversion• Social

Pressure



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Perspective

• The Fixed-Pie Bias is the notion that a gain for one party will correspond with an equivalent loss for the other party

• Naive Realism “hold[s] that people think, or simply assume without giving the matter any thought at all, that their own take on the world enjoys particular authenticity and will be shared by other open minded perceivers and seekers of truth.”

Preference

• Reactance Theory suggests “the attractiveness of options that are in danger of being lost will increase, while the attractiveness of options thrust upon someone by external circumstance or by another individual will decrease.”

• Aspirational Level means that the receipt of a specific concession or conciliatory proposal can alter the recipient’s aspiration or comparison level



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Protection

• Loss Aversion describes, “the fact that the averseness of a given loss tends to be greater than the attractiveness of a gain of the same objective magnitude.”

• Social Pressure suggests, “When a compromise is proposed in the context of a social or political struggle, it inevitably becomes the object of pointed debate and propagandizing.”

Spotting Bias



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HOW DO WE MANAGE REACTIVE DEVALUATION?

The Mediator’s Proposal

• One of the most frequently cited techniques for managing reactive devaluation is obtaining the services of a Mediator

• Based on the literature reviewed, the mediator’s ability to make proposals as a neutral not subject to the parties’ devaluation was primary reason mediation is cited as a viable means of addressing Reactive Devaluation



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Reality Testing

By helping parties evaluate a proposal in terms of their own interests and alternatives, a mediator may be able to counteract the tendency toward Reactive Devaluation.

-Adapted from Beyond Winning: Negotiating to Create Value in Deals and Disputes

Concession Management

• Creating and Ranking Concession Menus

• Discussion of Issues Prior Bargaining

• Acknowledgement with Concessions



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In Conclusion

Reactive Devaluation is influenced by several factors related to the party's Perspective (Fixed Pie Bias & Naive Realism), Preference (Reactance Theory & Aspirational Level), and/or need for Protection (Loss Aversion & Social Pressure)

Reactive Devaluation arises from the Availability of Options, Adversarial Relationships, and the perception of Asymmetrical Interests

Reactive Devaluation can managed through a number of techniques including: The Mediator’s Proposal, Reality Testing, and Concession Management

Question and Answer



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ReferencesDefining Reactive Devaluation (Description #1)

• Jared Curhan, Margaret Neale, and Lee Ross, “Dynamic valuation: Preference changes in the context of face‐to‐face negotiation,” Journal of Experimental Social Psychology 40 (2004)

Reactive Devaluation Research: U.S. ‐ U.S.S.R. Arms Reduction Study

• David A. Hoffman, “Mediation and the Art of Shuttle Diplomacy,” Negotiation Journal (July 2011)

• Randall Kiser, Beyond Right and Wrong: The Power of Effective Decision Making for Attorneys (Springer: 2010)

• Lee Ross, "Reactive Devaluation in Negotiation and Conflict Resolution," in Barriers to Conflict Resolution (W. W. Norton & Company: 1995)

Defining Reactive Devaluation (Floyd Spence)

• Barry Goldman, The Science of Settlement: Ideas for Negotiators (ALI‐ABA: 2008)

Defining Reactive Devaluation (Description #2)

• Arno R. Lodder and John Zelenznikow, Enhanced Dispute Resolution Through the Use of Information Technology (Cambridge University Press: 2010)

Reactive Devaluation Research: Stanford University’s Divestment Study

• Robert Mnookin, Scott Peppet, and Andrew Tulumello, Beyond Winning: Negotiation to Create Value in Deals and Disputes (Belknap Press: 2004)



Defining Reactive Devaluation (Marx)

• "Groucho Marx," Wikipedia.com, Last Modified June 19, 2014, http://en.wikiquote.org/wiki/Groucho_Marx

Defining Reactive Devaluation (Description #3)

• Lee Ross, “Dealing with Conflict: Experiences and Experiments,” in The Scientist and the Humanist: A Festschrift in Honor of Elliot Aronson, ed. Marti Hope Gonzales et al (Psychology Press: 2010)

ReferencesReactive Devaluation Research: Professor‐Student Negotiation Study


Defining Reactive Devaluation (Mao)

• Barry Goldman, The Science of Settlement: Ideas for Negotiators (ALI‐ABA: 2008)

Perspective

• Fixed Pie Bias ‐ Deepak Malhotra and Jeremy Ginges, “Beyond Reactive Devaluation: Implementation Concerns and Fixed‐pie Perceptions Involving the Geneva Accords” (paper presented at the 18th Annual Conference of the International Association for Conflict Management, Seville, Spain, June 12‐15, 2005)

• Fixed Pie Bias ‐ Barry Goldman, The Science of Settlement: Ideas for Negotiators (ALI‐ABA: 2008)

• Fixed Pie Bias ‐Max H. Bazerman , Jared R. Curhan , Don A. Moore and Kathleen L. Valley, “Negotiation,” Annual Review of Psychology (2000)

• Naive Realism ‐ Daniel Y. Lin, Emily Pronin, and Lee Ross, “The Bias Blind Spot: Perceptions of Bias in Self Versus Others,” Personality and Social Psychology Bulletin 28 (2002)

• Naive Realism ‐Max H. Bazerman , Jared R. Curhan , Don A. Moore and Kathleen L. Valley, “Negotiation,” Annual Review of Psychology (2000)

Preference

• Reactance Theory ‐ Jared Curhan, Margaret Neale, and Lee Ross, “Dynamic valuation: Preference changes in the context of face‐to‐face negotiation,” Journal of Experimental Social Psychology 40 (2004)

• Reactance Theory ‐“Several Examples of Reactance Research,” Pilgrim's Guide to Skip Beck's Courses, Appalachian State University. Last Accessed May 15, 2014, http://www1.appstate.edu/~beckhp/reactance.htm

• Reactance Theory ‐ Anca M. Miron and Jack W. Brehm, “Reactance Theory – 40 Years Later,” Zeitschrift für Sozialpsychologie(2006)

• Aspirational Level ‐ Lee Ross, "Reactive Devaluation in Negotiation and Conflict Resolution," in Barriers to Conflict Resolution (W. W. Norton & Company: 1995)



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ReferencesProtection

• Loss Aversion ‐ Lee Ross, "Reactive Devaluation in Negotiation and Conflict Resolution," in Barriers to Conflict Resolution (W. W. Norton & Company: 1995)

• Loss Aversion ‐Marti Hope Gonzales, Carol Tavris, Joshua Aronson, The Scientist and the Humanist: A Festschrift in Honor of Elliot Aronson,(Psychology Press: 2011)

• Loss Aversion ‐ Eldar Shafir, The Behavioral Foundations of Public Policy, (Princeton University Press: 2013).

• Social Pressure ‐ Lee Ross, "Reactive Devaluation in Negotiation and Conflict Resolution," in Barriers to Conflict Resolution (W. W. Norton & Company: 1995)

The Mediator’s Proposal


• Carrie Menkel‐Meadow, “Why Hasn’t the World Gotten to Yes? An Appreciation and Some Reflections,” Negotiation Journal (October 2006)

• Dwight Golann, Mediating Legal Disputes: Effective Strategies for Neutrals and Advocates (American Bar Association: 2009)

• David A. Hoffman, “Mediation and the Art of Shuttle Diplomacy,” Negotiation Journal (July 2011)

Reality Testing

• Robert Mnookin, Scott Peppet, and Andrew Tulumello, Beyond winning: Negotiation to create value in deals and disputes(Belknap Press: 2004)

• Alan Stitt, Mediation: A Practical Guide (Routledge: 2004)

Concession Management

• Laurence Boulle, Michael T. Colatrella (Jr.), and Anthony P. Picchioni, Mediation: Skills and Techniques (LexisNexis: 2008)


• Marti Hope Gonzales, Carol Tavris, Joshua Aronson, The Scientist and the Humanist: A Festschrift in Honor of Elliot Aronson(Psychology Press: 2011)



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