Lake Wobegon Upside Down: The Paradox of Status-Devaluation

This paper examines a cognitive bias whereby respondents in postcommunist Bulgaria systematically decrease their self estimates on material welfare in contrast to the well-established status-enhancement bias. The analysis shows that the main reason for the occurrence of status-devaluation is the experience of relative deprivation in postcommunism, reflected in unfulfilled expectations and the perception of status loss relative to socialism. The bias is reinforced by a process of network closure under conditions of high uncertainty and accelerated social change. More homogeneous personal networks provide reference points, which make high-status actors more likely to see themselves as low-status.