Reactive Devaluation as a Psychological Impediment to Construction Dispute Negotiation

Abstract

Disputes are common in construction projects. Protracted dispute resolution processes drain valuable resources. Therefore, promoting efficient construction dispute negotiation (CDN) has been one of the key recommendations of almost every construction industry review. Moreover, irrational decisions of disputants could negatively affect dispute negotiation. One cause of irrational decision is reactive devaluation (RD), which describes the devaluation of a proposal raised by the counterpart. Disputants having RD behavior reject proposals raised by the counterpart with no regard to the quality and reasonableness of the proposal. Thus the occurrence of RD in CDN decisions stifles proposal exchanges that are essential to successful settlement. This study examined the practices of RD in CDN. Manifestations of RD were developed from the literature and then operationalized in CDN. With data provided by construction professionals, five taxonomies of RD in CDN were obtained through principal component factor analysis. The five taxonomies are reluctance to change, doubts about the counterpart’s ability, overconfidence, biased information processing, and mistrust toward the counterpart. Correspondingly, mitigation measures to alleviate RD respective to the taxonomies were provided. The conceptualization of RD brings insight for future studies investigating other forms of psychological impediment to amicable CDN. Minimizing measures of RD suggested in this study can motivate further studies of strategies to enhance success in CDN.