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

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  • Neale, Maragaret
  • Ross, Lee
  • Curhan, Jared

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 as well as post-settlement satisfaction. Underlying attributional mechanisms and implications of these findings for facilitating agreements are discussed.

Suggested Citation

  • Neale, Maragaret & Ross, Lee & Curhan, Jared, 2002. "Dynamic Valuation: Preference Changes in the Context of Face-to-face Negotiation," Working papers 4253-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    • Handle: RePEc:mit:sloanp:1601
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    File URL: http://hdl.handle.net/1721.1/1601
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    References listed on IDEAS

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    1. Grether, David M & Plott, Charles R, 1979. "Economic Theory of Choice and the Preference Reversal Phenomenon," American Economic Review, American Economic Association, vol. 69(4), pages 623-638, September.
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