STATUS-QUO BIAS AND ITS DETERMINANT
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2020-07-20
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en
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Abstract
Status-quo bias has been found to be one of the anomalies in the human decision-making process. This bias is detrimental to people's behaviors as it reinforces the avoidance to change and limit innovations. This study aims to analyze the impact of two factors, which are loss aversion and complexity of decision on the emergence of status-quo bias. An experiment has been set up with questions containing pairs of choices, asking people to decide under the influence of individual loss aversion and the intervention of complexity. The experimental results provide convincing insights about the impact of these two determinants on the tendency of being status-quo. This study shows a positive correlation between loss aversion and the status-quo bias. If a person is loss averse, he or she tends to keep the initial choice. The complexity of decision also significantly affects the development of status-quo bias. Specifically, when people face more sophisticated options, they tend to reject the opportunity to change.
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Faculteit der Managementwetenschappen