Dynamic Valuation: Preference Changes in the Context of Face-to-face Negotiation

Jared R. Curhan
Massachusetts Institute of Technology (MIT) – Sloan School of Management

Margaret Neale
Stanford Graduate School of Business

Lee D. Ross
Stanford University – Psychology

MIT Sloan Working Paper No. 4253-02; Harvard PON Working Paper
Journal of Experimental Social Psychology, Vol. 40, pp. 142-151, 2004

Abstract:

This study examines the dynamics of preference change in the context of face-to-face negotiation. Participants playing the role of «student» or «financial aid officer» exchanged proposals regarding the terms of a student loan. In accord with dissonance theory, participants increased their liking for proposals they offered and/or ultimately accepted. The reactance theory prediction that participants would devalue proposals received from their counterparts was confirmed for loan officers, but not for students. A pair of experimental manipulations involving pre-rating of proposals and the opportunity for participants to engage in brief discussions prior to the initial exchange of offers mediated these effects and influenced subsequent rates of agreement and post-settlement satisfaction. Underlying attributional mechanisms and implications of these findings for facilitating agreements are discussed.

Dynamic Valuation- Preference Changes in the Context of Face-to-face Negotiation