What is the Status Quo Bias – Causes & Examples
Published by at July 17th, 2023 , Revised On October 5, 2023
We have to make different choices every day in our lives. Do you feel like sticking to your routine? When in a restaurant, do you order the same cuisine repeatedly? Do you make the same choice for breakfast often? This pattern of sticking to our routine and not taking any alternative routes is known as status quo bias. Let’s understand this cognitive bias in detail.
What is the Status Quo Bias?
Before moving forward, let’s understand the meaning of status quo bias. There can be many definitions, but the most appropriate one to define the status quo is,
‘’ The propensity for people to favour the present situation and resist change is called the status quo bias. ‘’
It is a cognitive bias that favours maintaining the status quo or choosing the default course of action when making decisions. The status quo bias can appear in various contexts, such as societal conventions, organisational procedures, and individual decisions. It frequently results from a confluence of familiarity, inertia, resistance to uncertainty, and a need to steer clear of possible losses or regrets connected with change.
What is the Relation Between the Endowment Effect, Loss Aversion, and Status Quo Bias?
These three abases are linked and can affect decisions made in various contexts, such as purchasing, financial, and organisational decisions.
The Endowment Effect
The endowment effect is a tendency for people to regard items they already possess more highly than similar things they do not. It suggests that individuals value their possessions excessively because they already own them.
Loss Aversion
It refers to the tendency for people to feel the pain of losses more keenly than the pleasure of comparable gains. It suggests that potential benefits motivate people more than loss aversion.
Status Quo Bias
The propensity for people to favour the status quo over alternative possibilities is known as status quo bias. It results from a need for consistency, a dread of change, and a dislike of uncertainty.
What are the Causes of the Status Quo Bias?
The following are some causes of status quo bias:
Cognitive Inertia
People tend to hold onto tried-and-true habits and preconceived notions. Studying and weighing new ideas or alternatives requires mental effort. The status quo bias results from this desire for the way that presents the least difficulty, where people are more likely to maintain the status quo than to consider and accept change.
People are typically more sensitive to possible losses than rewards, known as loss aversion. The fear of making the wrong choice or feeling regrettably wrong can be the driving force behind the status quo bias because there is less chance of suffering losses linked to change; maintaining the status quo feels safer and cosier.
Endowment Effect
People regard items they already have more highly than similar ones they don’t. It occurs when people become attached to their present circumstances or belongings and are reluctant to let go of them or examine alternatives, giving rise to the status quo bias.
Cognitive Biases
Cognitive biases, including familiarity and anchoring, can influence the status quo bias. Individuals tend to choose familiar and well-known things, and judgements and decisions are more difficult to change when anchored to an original reference point due to anchoring bias.
Social Norms and Conformity
By setting expectations and pressure to follow established practises and traditions, societal and cultural norms can promote the status quo bias. Due to a need for social approval and conformity, individuals may follow these rules even if they are not personally advantageous or logical.
How to Overcome Status Quo Bias?
Critique underlying attitudes and assumptions that underpin the status quo to begin challenging them. Ask yourself why something is done a certain way and consider whether better or more efficient methods are available.
- Some measures can be taken to overcome the status quo, but looking for unique viewpoints and suggestions from various stakeholders is important. Open up the conversation and welcome opposing viewpoints.
- Encourage people to come up with fresh ideas and try them out, even if they go against the grain of convention.
- Examine the potential costs and dangers related to sustaining the status quo. Take into account the consequences of inaction. Draw attention to the missing opportunities, stagnation, or unfavourable outcomes resulting from resistance to change.
- Break things down into manageable steps. Overcoming the status quo bias can be difficult when faced with significant changes. Break the process down into more manageable, incrementally introducing change steps. With this strategy, people are more likely to feel at ease with novel concepts and see them through to completion.
- Embracing these concepts, Encourages experimentation and learning from successes and failures. Stress the value of acquiring information, testing theories, and modifying plans in light of findings.
Status Quo Bias Examples in Daily Life
The field of behavioural economics studies how psychological and cognitive biases affect economic judgements and behaviour.
In this context, “status quo bias” refers to the propensity for people to favour the status quo or the default alternative while making economic decisions.
Example of Status Quo Bias in Behavioural Economics
One example of status quo bias in behavioural economics can be observed in the context of retirement savings. The default option for retirement savings is typically enrollment in an employer-provided pension scheme, with employees having to opt out if they want to refrain from participating actively. This system encourages individuals to save for retirement by leveraging the status quo bias.
The status quo bias suggests that people stick with the default option or the existing arrangement unless they have a compelling reason to change. In the case of retirement savings, many employees who might not have otherwise enrolled in a pension scheme remain enrolled simply because it is the default option.
Example of Status Quo Bias in Decision Making
Status quo bias in decision-making is motivated by a need for consistency, fear of change, and dislike of ambiguity. The bias can appear in many decision-making processes, such as sticking with tried-and-true goods or services, continuing daily rituals, or favouring established rules or practises.
An example of status quo bias in decision-making can be seen when selecting a mobile phone provider. Suppose an individual has been with the same provider for several years and has become accustomed to the service, features, and billing system.
Despite the availability of alternative providers that may offer better deals, superior network coverage, or more advanced technology, the individual may exhibit status quo bias by hesitating to switch.
The familiarity of the current provider may outweigh the potential benefits of switching, leading to a decision to maintain the status quo rather than exploring alternative options.
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Status Quo Bias in the Workplace
Status quo bias psychology can hinder organisations from adapting to new market conditions, embracing technological advancements, or addressing systemic issues.
Overcoming status quo bias in the workplace often requires effective communication and a clear rationale for change.
Example of Status Quo Bias in the Workplace
An example of status quo bias in the workplace can be observed in the context of performance evaluations and promotions. Suppose there is a long-standing practice of using annual performance reviews as the primary basis for determining promotions and salary increases.
Despite research and evidence suggesting that more frequent and ongoing feedback can lead to better employee development and performance, the organisation continues to rely on the traditional annual review process.
Frequently Asked Questions
The status quo bias is a cognitive bias where people prefer the current situation and resist change when making decisions, often due to familiarity, inertia, and a fear of uncertainty or potential losses associated with change.
An example of status quo bias is when someone sticks with their current mobile phone provider despite the availability of better alternatives. The familiarity and comfort of the existing provider outweigh the potential benefits of switching, leading to a decision to maintain the status quo.
Inertia bias refers to a tendency to stick with the default option or the path of least resistance due to a lack of motivation or effort to consider alternatives. Status quo bias, on the other hand, specifically relates to favouring the existing situation and resisting change, often driven by familiarity and a fear of uncertainty.
To avoid status quo bias, consciously challenge existing assumptions, seek alternative perspectives, and evaluate the potential benefits of change.
