Have you ever wonder why you stick to the same cable provider, if every time you want to watch a movie you end up paying extra for it? Or why you have tried only 2 or 3 dishes in your favourite restaurant? It seems that we tend to stick with what we know, right? Even when it’s not money wise, or if it means we miss some good (unknown) stuff.
To put it in simple words we are habit rabbits. We like the familiar, we rather keep what we have, almost as if we were too lazy to change. This aspect of people has been long known for psychologists and economists. Let’s take a look at the bias that make us habit rabbits.
Formally, it is known as the Status Quo bias. It happens when people decide to stick to the current situation, even if a new situation represents an advantage; or when people choose to do nothing in order to change the current state of affairs. So, it’s a decision or omission that leave things unchanged.
For instance, you damn the traffic in your way job every single day, but you never try a different route.
Status quo bias has been documented in several kind of decision making scenarios (important ones!): people rather stick to their pension plans, electric companies rates or insurance policy irrespective of the benefits associated with old and new scenarios.
What mechanisms explain status quo bias?
Status quo has been linked to several psychological mechanisms, one of them is loss aversion. Loss aversion means that we try to avoid losses as much as we can. And when it comes to deciding whether to stick to the known or switch to the unknown, we feel that the potential disadvantages of leaving our present situation are worse than the potential benefits of a new one. So yeah, let’s leave things as they are, you know, just in case.
In addition, leaving things as they are requires less effort, especially when the are many competing choices or when people do not have pre existing preferences. Imagine you go to the grocery store to buy cereal and find 20 different brands, several flavors, different prices… This overload of information can be overwhelming, so overwhelming that you grab the same old box, one more time.
Or picture that you are visiting a new place and would like to drink a coffee. Are you willing to try a local brand, in a new country, or rather stick to the old-known Starbuck’s?
Having a habit for habits also relates to psychological inertia, the tendency of humans to stay with a previously made choice, irrespective of the consequences of that choice. For instance in 2015 about an astonishing 2 million US-American customers of AOL still paid monthly fees for dial-up internet connections
And finally, a close relative of the status quo bias is the default option bias. Here is an interesting example: in countries where there is an opt-in policy for being an organ donor the amount of people registered as donors is way lower than in countries where there is an opt-out policy. So, if your default situation is as non-donor, you stay like that. On the other hand, if your default situation is as a donor... you also stay like that!! The default option bias is a powerful tool to influence people decisions without restricting freedom, and can therefore be considered a type of nudge.
Habit rabbits, that’s what we are. Want a carrot already?
Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1991). Anomalies: The endowment effect, loss aversion, and status quo bias. Journal of Economic perspectives, 5(1), 193-206.
Samuelson, W., & Zeckhauser, R. (1988). Status quo bias in decision making. Journal of risk and uncertainty, 1(1), 7-59.