New Zealand Law Society - Reactive devaluation

Reactive devaluation

Reactive devaluation

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Conflict is inevitable and is often necessary to bring about change. Our reaction to conflict is typically a problem in itself as we lack robust and fair conflict resolution strategies, all too often falling back on our biases and prejudices even when we think we are being rational.

Reactive devaluation is one of the five psychological traits that most often come into play during the mediation process. Previous articles have examined cognitive bias and cognitive dissonance. This article discusses the importance of reactive devaluation and strategies to avoid its affects.

Reactive devaluation is the idea that our perception of a particular proposal or offer is influenced by our opinion of the party who made it. In conflict resolution, the value of an offer may be diminished in the eyes of the recipient due to their negative opinion of the opposing party, rather than reflecting the offer to hand. This reaction makes it more difficult for parties to reach an agreement even when proposals are made in good faith and would be considered objectively fair by a non-judgmental observer.

In the context of negotiation, reactive devaluation leads parties to devalue and reject offers that would otherwise be considered reasonable. Instead of focusing on the immediate discussion, parties tend to focus too much on who they are in conflict with. When in conflict parties often become fixated on “beating” the other party rather than exploring fair solutions, which demonstrates the prominent part that our emotions play in conflict. It is often difficult for us as human beings to put our feelings aside and focus on the mechanics and resolution of the problem.

Lee Ross, Professor of Psychology at Stanford University, has conducted a significant amount of research into the psychological barriers that prevent conflict resolution. In his work chapter “Reactive Devaluation in Negotiation and Conflict Resolution” (Kenneth J. Arrow, et al., Eds., Barriers to Conflict Resolution, W.W. Norton & Company, 1995, p.27-42), Ross identified a number of cognitive and motivational processes which lead to reactive devaluation: perception, preferences, loss aversion, and heightened scrutiny. Understanding these factors may enable us to better address the challenges that reactive devaluation brings when attempting to reach agreement over disputes.


When party A’s offer is inconsistent with party B’s expectations and understanding of their interests, party B may sceptically assess the offer and begin searching for “evidence” that the offer is more advantageous for party A. Parties who receive offers may conclude that it must be a bad deal for them merely because party A made the offer. Simply being in an adversarial relationship can be a factor in reactive devaluation. That is, if party A makes the offer, then it must be good only for party A, due to the competitive nature of the relationship and the existence of a dispute.

A 2002 study on the Israeli/Palestine conflict highlights the barriers that arise from reactive devaluation. The researchers in the study asked Israelis and Palestinians if they would support a specific peace plan, which was an Israeli peace plan. However, the Israeli subjects were told that it was a Palestinian proposal. The study found that both sides devalued the proposal purely because it was presented as the ‘other side’s’.

The Israel/Palestine conflict also provides an example of how a person’s sense of identity and culture contributes to our perception of others and plays a role in our tendency for reactive devaluation. It is the “them and us” mentality that drives our perception of others. Both Palestinians and Israelis have proud cultural identities that involve feelings of animosity toward the other. Therefore, agreeing to a peace plan from the other side arguably means “losing” to what is perceived to be an inferior group. Similar dynamics may apply in mediation, where the personal pride and dignity of both parties may interfere with their ability to come to a reasonable arrangement.


Ross summarises the preferences process as follows: “Human beings, at least in some circumstances, may be inclined to reject or devalue whatever is available to them, and to vet and strive for whatever is denied” (page 38). In other words, the grass is always greener on the other side. Here, negotiator B rejects A’s proposal, not because of an adversarial view, but purely because the proposal is available.

Conflicting parties will often strive for a better or different arrangement than what is offered, adopting the mentality that engaging in tense and rigorous arguments will result in a better deal for them. Parties in conflict will often reject what is readily available and on offer.

Loss Aversion

Loss aversion may have a significant relationship with reactive devaluation. Human beings recall the pain associated with loss much more vividly than the feelings associated with experiencing a win – “losses loom larger than gains” (Ross, p.42). This means that parties in mediation are motivated to avoid loss. In relation to reactive devaluation, party B will reject or devalue party A’s offer as they assess their losses as outweighing their gains.

Heightened Scrutiny

This occurs when a party analysing an offer begins to judge it less favourably. Psychologically, something judged unfavorable is perceived in a more negative light the longer it is considered.

Strategies to combat reactive devaluation

Conflict resolution professionals can use a range of strategies and tools to address reactive devaluation in mediation. This includes using a collaborative negotiation style to identify the underlying interests of both parties. Through this, settlement arrangements can be reached efficiently and equitably.

Allowing ample opportunities for parties to discuss their standpoints during negotiations is vital in order to achieve a collective understanding of the issues within the dispute. While doing this, it is also important to encourage parties to revert back to the key factors driving the conflict, without the emotional influence. This enables the parties to assess potential proposals at face value, without focusing on who is making the offer.

Timing is also key. Negotiation expert Randolph Lowry said, “The right offer at the wrong time is the wrong offer” (interview on, 9 December 2018). Rushing the agreement will not achieve the desired result and will invite devaluation. It is important that the negotiation process is conducted methodically to ensure settlements can be reached that reflect the interests of both sides. It takes time to achieve fairness and a level of mutual respect between parties.

Paul Sills is an Auckland barrister and mediator, specialising in commercial and civil litigation. He is an AMINZ Mediation Panel member.

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