Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/145423
Authors: 
Dean, Mark
Kibris, Özgür
Masatlioglu, Yusufcan
Year of Publication: 
2014
Series/Report no.: 
Working Paper, Brown University, Department of Economics 2014-11
Abstract: 
We introduce and axiomatically characterize a model of status quo bias in which the status quo affects choices by both changing preferences and focusing attention. The resulting Limited Attention Status Quo Bias model can explain both the finding that status quo bias is more prevalent in larger choice sets and that the introduction of a status quo can change choices between non-status quo alternatives. Existing models of status quo bias are inconsistent with the former finding while models of decision avoidance are inconsistent with the latter. We report the results of laboratory experiments which show that both attention and preference channels are necessary to explain the impact of status quo on choice.
Subjects: 
Status Quo Bias
Reference Dependence
Attention
Revealed Preference
JEL: 
D03
D83
Document Type: 
Working Paper

Files in This Item:
File
Size
365.56 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.