The Impact of Status Quo Bias on People’s Choices

Research Article
Open access

The Impact of Status Quo Bias on People’s Choices

Ziyang Cheng 1
  • 1 University of Birmingham    
  • *corresponding author
Published on 13 September 2023 | https://doi.org/10.54254/2754-1169/10/20230442
AEMPS Vol.10
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-47-8
ISBN (Online): 978-1-915371-48-5

Abstract

In behavioral economics, status quo bias is a cognitive bias that refers to when people are faced with the choice of maintaining the status quo versus making changes. People tend to maintain the current state rather than take actions to change it. The existence of status quo bias challenges the traditional economic hypothesis that people are rational. In this essay, we show the impact of status quo bias on people’s decision-making, and its possible impacts through three experiments, namely, beverage manufacturers’ new products, elections, and food preferences. Our analysis proves that managers need to fully consider people’s preferences for the status quo when launching new products, and then appropriately reduce their estimates of expected profits to ensure the accuracy of forecasts.

Keywords:

status quo bias, cognitive bias, decision-making, behavioral economics, risk aversion

Cheng,Z. (2023). The Impact of Status Quo Bias on People’s Choices. Advances in Economics, Management and Political Sciences,10,111-115.
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References

[1]. Kahneman, D., 2011. Thinking, fast and slow. Macmillan.

[2]. Dean, M., Kıbrıs, Ö. and Masatlioglu, Y., 2017. Limited attention and status quo bias. Journal of Economic Theory, 169, pp.93-127.

[3]. Nebel, J., 2015. Status Quo Bias, Rationality, and Conservatism about Value. Ethics, 125(2), pp.449-476.

[4]. Samuelson, W. and Zeckhauser, R., 1988. Status quo bias in decision making. Journal of risk and uncertainty, 1(1), pp.7-59.

[5]. Cobb, J., 2015. What Coca-Cola’s Marketing Blunder Can Teach Us About America. [online] Time. Available at: <https://time.com/3950205/new-coke-history-america/>.

[6]. Investopedia, 2022. Presidents Who Didn't Win a Second Term. [online] Investopedia. Available at: <https://www.investopedia.com/financial-edge/0812/5-presidents-who-couldnt-secure-a-second-term.aspx> [Accessed 22 August 2022].

[7]. Sheffer, L., 2019. Political Accountability, Legislator Gender, and the Status Quo Bias. Politics &amp; Gender, 17(3), pp.365-401.

[8]. Bergeron, S., Doyon, M., Saulais, L., & Labrecque, J. (2019). Using insights from behavioral economics to nudge individuals towards healthier choices when eating out: A restaurant experiment. Food Quality and Preference, 73, 56-64.

Cite this article

Cheng,Z. (2023). The Impact of Status Quo Bias on People’s Choices. Advances in Economics, Management and Political Sciences,10,111-115.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies

ISBN：978-1-915371-47-8(Print) / 978-1-915371-48-5(Online)
Editor：Javier Cifuentes-Faura, Canh Thien Dang
Conference website: https://2023.confbps.org/
Conference date: 26 February 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.10
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Kahneman, D., 2011. Thinking, fast and slow. Macmillan.

[2]. Dean, M., Kıbrıs, Ö. and Masatlioglu, Y., 2017. Limited attention and status quo bias. Journal of Economic Theory, 169, pp.93-127.

[3]. Nebel, J., 2015. Status Quo Bias, Rationality, and Conservatism about Value. Ethics, 125(2), pp.449-476.

[4]. Samuelson, W. and Zeckhauser, R., 1988. Status quo bias in decision making. Journal of risk and uncertainty, 1(1), pp.7-59.

[5]. Cobb, J., 2015. What Coca-Cola’s Marketing Blunder Can Teach Us About America. [online] Time. Available at: <https://time.com/3950205/new-coke-history-america/>.

[6]. Investopedia, 2022. Presidents Who Didn't Win a Second Term. [online] Investopedia. Available at: <https://www.investopedia.com/financial-edge/0812/5-presidents-who-couldnt-secure-a-second-term.aspx> [Accessed 22 August 2022].

[7]. Sheffer, L., 2019. Political Accountability, Legislator Gender, and the Status Quo Bias. Politics &amp; Gender, 17(3), pp.365-401.

[8]. Bergeron, S., Doyon, M., Saulais, L., & Labrecque, J. (2019). Using insights from behavioral economics to nudge individuals towards healthier choices when eating out: A restaurant experiment. Food Quality and Preference, 73, 56-64.

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