@inbook{8b2c9fa50c1547e998ee3309f78c8de3,
title = "Special Forms of Bias: Endowment Effect and Reactive Devaluation",
abstract = "Two special forms of bias, endowment and reactive devaluation are examined. Endowment effect (EE) describes the phenomenon that people would require more to relinquish items that they own than they would be willing to pay for the same. There are four sources of EE: ownership, loss aversion, status quo bias and strategic bargaining habit. It was further found that construction disputing parties from different construction sectors displayed a similar extent of EE behaviours in CDN. Reactive devaluation (RD) is another well-recognized psychological bias and describes the tendency of downgrading the value of offers proposed by the negotiating counterpart. Five taxonomies of RD behaviours in CDN were identified in this study. These are reluctance to change; doubts about counterpart{\textquoteright}s ability; overconfidence; biased information processing and mistrust towards the counterpart. The potency of these taxonomies was validated with confirmatory factor analysis. The findings timely remind the construction dispute negotiators should review settlement offers with an open mind.",
author = "Cheung, {Sai On} and Keyao Li",
year = "2022",
doi = "10.1007/978-3-030-80256-1_4",
language = "English",
isbn = "978-3-030-80255-4",
series = "Springer Tracts in Civil Engineering",
publisher = "Springer, Cham",
pages = "83--118",
editor = "Cheung, {Sai On}",
booktitle = "Construction Dispute Research Expanded",
}