Lowballed by the Landlord

Over the past week, my landlord has been pressing my housemates about whether they are extending the tenancy agreement for another year. They (mostly second years) were quite keen on it since the house was conveniently located and nobody wanted to have to go through the hassle of relocating, so they expressed their intentions of staying on in the house for another academic year.

As they discussed details of the lease with the landlord, he reassured them that the rent per month would not be increased, and hurried them into providing him with a confirmation because he wanted to “finalise his finances”. Wanting to be cooperative tenants, they quickly agreed and sent him information such as full names and student ID numbers for him to prepare the new contract that he would eventually deliver a couple of hours later.

Upon receipt of the new contract, I joined my housemates in reviewing it and noticed that the period of lease was unexpectedly longer. In the past 2 years, this landlord (he owns around 10 houses in Canley, and some of the tenants are my friends) has provided students with 11-month contracts. However, I noticed that the new contract was for a 12-month lease. I got one of my housemates to drop him a text message and clarify if it was a mistake. Well, it wasn’t.

They were all rather disappointed but eventually decided to sign the contract anyway, settling for a rent that was effectively increased by ~9%.  My housemates had effectively been lowballed.

Cialdini (2008) suggests that lowballing operates through getting buyers to commit to a decision and stick to it even when the terms of the deal have become less favourable. This was what had happened to my housemates. In a year where the value of the pound had crashed, the proposition of having no increase in rent was enticing and they quickly committed to it, only to find out that the lease period was increased by an additional month on the contract, effectively increasing the rent.

In one of the early studies on lowballing, the effectiveness of lowballing was experimentally tested under the guise of inviting undergraduate students to take part in a psychology study (Cialdini, Cacioppo, Bassett & Miller, 1978). By changing the order in which information was presented, Cialdini et al. (1978) managed to get markedly increased verbal and behavioural compliance. In the study, undergraduates were either (i) asked if they would like to participate in a study at 7am (control condition), or (ii) asked if they would like to participate in a study, then told that it would be at 7am after they agreed (lowballed condition). Cialdini et al. (1978) eventually reported that students who were lowballed verbally agreed to the request more (56% of vs 31% of control condition participants) and turned up to the ‘experiment’ at 7am more (53% vs 24% of control condition participants).

The effectiveness of the lowballing method was further confirmed in a more recent meta-analysis looking at experiments studying increased compliance via lowballing over the years. Burger and Caputo (2015) reviewed and showed that most of the time, lowballing did result in increased compliance compared to the control condition in studies.

Figure 1. Table from Burger and Caputo (2015) summarising results of experiments studying the effectiveness of getting compliance through lowballing. 

Burger and Caputo (2015) also proposed three reasons for why the lowballing method might be so effective: (i) commitment to action, (ii) commitment to person and (iii) self-presentation. On hindsight, all 3 reasons could potentially be factors that contributed to my housemates settling for a poor deal.

Having given verbal agreement to extend the lease of the house we currently stay in, a degree of commitment was formed to the action of staying on and not having to find a new house to move into. There was also a certain degree of commitment to person, as all the communication was with the landlord directly. Having prepared and personally delivered the contract with the names and details of my housemates was likely to have increased this sense of ‘commitment to person’, which has been shown to be key in successful lowballing (Burger & Petty, 1981). Last but not least, even though there was no ‘public’ pledge or agreement made, having sent text messages confirming their intention to stay on in the house would have resulted in self-presentation concerns such as whether they were being nasty or wasting the landlord’s time if they decided to pull the plug on the deal.

Well, a couple of days after the contracts were signed, none of my housemates seem too unhappy about it anymore. Perhaps they got over it, like how others on the receiving end of lowball would eventually have to, or perhaps its just cognitive dissonance helping to put their minds at ease.

Peng Ning TAN

References:

Burger, J. M, & Caputo, D. (2015). The low-ball compliance procedure: a meta-analysis. Social Influence, 10, 214-220.

Burger, J. M., & Petty, R. E. (1981). The low-ball compliance technique: Task or person commitment? Journal of Personality and Social Psychology, 40, 492-500.

Cialdini, R. B. (2009). Influence: Science and Practice. Boston: Pearson Education.
Cialdini, R. B., Cacioppo, J. T., Bassett, R., & Miller, J. A. (1978). Low-ball procedure for producing compliance: Commitment then cost. Journal of Personality and Social Psychology, 36, 463–476.