Status Quo Bias/Effect

Definition 1

Increased likelihood of making the same (or similar) decisions in the future as were made in the past.

Source: Behavioral Science Lab, 2017

Definition 2

Status quo bias is evident when people prefer things to stay the same by doing nothing (see also inertia) or by sticking with a decision made previously (Samuelson, & Zeckhauser, 1988). This may happen even when only small transition costs are involved and the importance of the decision is great.

Samuelson and Zeckhauser note that status quo bias is consistent with loss aversion, and that it could be psychologically explained by previously made commitments, sunk cost thinking, cognitive dissonance, a need to feel in control, and regret avoidance. The latter is based on Kahneman and Tversky’s observation that people feel greater regret for bad outcomes that result from new actions taken than for bad consequences that are the consequence of inaction (Kahneman & Tversky, 1982).

While status quo bias is frequently considered to be irrational, sticking to choices that worked in the past is often a safe and less difficult decision due to informational and cognitive limitations (see bounded rationality). For example, status quo bias is more likely when there is choice overload (Dean et al., 2017) or high uncertainty and deliberation costs (Nebel, 2015).

Source: Behavioral Economics