Science Fair Project Encyclopedia
Status quo bias
Kahneman, Thaler and Knetch created experiments that could produce this effect reliably. They attribute it to a combination of loss aversion and the endowment effect, two ideas relevant to prospect theory. The US states of New Jersey and Pennsylvania inadvertently ran a real life experiment providing evidence of the status quo bias in the early 1990s. As part of tort law reform programs, citizens were offered two options for their automotive insurance - an expensive option giving them full right to sue and a less expensive option with restricted rights to sue. Each of the options was roughly equivalent to the other. In New Jersey the more expensive option was the default and 75% of citizens 'selected' while only 20% chose this option in Pennsylvania where the other option was the default.
- Samuelson, W. & R. J. Zeckhauser. (1988). Status quo bias in decision making. Journal of Risk and Uncertainty, 1, pp. 7-59.
- Kahneman, D., Knetch, J. L. & Thaler, R. H. (1991). Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias. Journal of Economic Perspectives, 5, 1, pp. 193-206
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