<ul><li>When offered other sandwich options for lunch, individuals often choose a sandwich they have eaten before.</li><li>In 1985, Coca Cola brought out a "New Coke". Consumers chose the Coke Classic even though blind taste tests found that consumers preferred New Coke.</li><li>In political elections, the existing candidate is more likely to win than the challenger.</li><li>When a company adds new insurance plans to the list of insurance options, existing employees will choose old plans while new employees will choose new plans.</li></ul>

Real-world example of status quo bias

The sunk cost fallacy refers to the idea that a person will often continue to invest resources such as time, money, or effort into a specific course of action, even if it is failing. The sunk cost fallacy contribute to the status quo bias because the more a person invests in a status quo, the more likely they will continue to invest in it.

Sunk costs

The mere exposure effect states that people prefer something they've been exposed to before. If we are more exposed to the status quo, then that exposure creates a preference for the status quo.

Mere exposure effect

A status quo bias can be rational if the potential transition cost is more than the benefits of switching to the alternative. Status quo bias is irrational when individuals ignore choices that are beneficial to their situation because they want to maintain the status quo.

Rationality vs irrationality

The status quo bias refers to the idea of preferring that your environment and situation remain as it is. In decision making, someone impacted by the status quo bias tends to prefer the familiar choice, even if another option is potentially more beneficial.

The Status Quo Bias

In a 1988 article named "Status quo bias in decision making", researchers described various decision-making experiments that demonstrated the existence of the bias. In one experiment, two groups were given a hypothetical scenario of inheriting a large sum of money.<ul><li>Group one was instructed to invest the money by choosing from a series of equally valid fixed options.</li><li>The other group were told that money was already invested in a certain way and then presented with alternative investment options.</li><li>Participants in group two tended to choose the status quo.</li></ul>

Early research of status quo bias

Studies show that in decision-making, individuals weigh the potential for loss more heavily than the potential for gain.&nbsp; They will focus on what they could lose by rejecting the status quo rather than on what they could gain by trying something different.

Loss aversion

Cognitive dissonance results from holding two opposing views or thoughts. However, holding two opposing views makes people feel uncomfortable and cause them to choose one option to maintain cognitive consistency. In decision-making, individuals tend to see one option as more valuable once they've chosen it. Even considering an alternative can cause cognitive dissonance, resulting in sticking with the status quo.

Cognitive dissonance

Status quo bias refers to the phenomenon of preferring that one's environment and situation remain as they already are.

Loss aversion

Similar ideas to Loss aversion

A Lesson in Loss Aversion

Common Explanations for Status Quo Bias

Embrace The Jomo