Advances in Economics, Management and Political Sciences

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

Series Vol. 10 , 13 September 2023


Open Access | Article

The Impact of Status Quo Bias on People’s Choices

Ziyang Cheng 1
1 University of Birmingham

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 10, 111-115
Published 13 September 2023. © 13 September 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Ziyang Cheng. The Impact of Status Quo Bias on People’s Choices. AEMPS (2023) Vol. 10: 111-115. DOI: 10.54254/2754-1169/10/20230442.

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

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.

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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Volume Title
Proceedings of the 2nd International Conference on Business and Policy Studies
ISBN (Print)
978-1-915371-47-8
ISBN (Online)
978-1-915371-48-5
Published Date
13 September 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/10/20230442
Copyright
13 September 2023
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated