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“Status Quo Bias in Decision Making“ by Samuelson and Zeckhauser Essay (Critical Writing)


An article titled “Status Quo Bias in Decision Making“ written by Samuelson and Zeckhauser provides an exploration of a behavioral phenomenon called status quo bias (1988). The pioneering work utilized the methods and theories from the fields of economics and psychology in order to provide an explanation for this concept and its possible applications in marketing, management, and science among others.

Utility theory that explains the decision-making process as a series of rational choices made by individuals with the sole purpose of maximizing their utility was challenged in the study. Samuelson and Zeckhauser conducted several survey experiments in order to show that utilitarian approach to the explanation of reasons behind a particular decision cannot provide an understanding of some behaviors (1988). They directed an experiment in which participants were assigned roles of commissioners whose main responsibility was to allocate scarce water to town and farmers. The respondents were allowed to choose from ten options for possible distribution alternatives one of which was always presented as status quo. The study results suggested that when given a choice that is being framed as status quo, participants tend to opt for it and disregard other alternatives. Samuelson and Zeckhauser called this phenomenon “status quo bias” and provided a couple of explanations for the peculiar behavior (1988).

The scientists explored the theory of rational decision and argued that status quo framing plays a significant role in subjects’ decision-making process. They also noticed that the increase in the number of options results in the stronger preference for the existing state of affairs. Conversely, the reduction of available alternatives led to the increase of other discernable preferences of an individual (Samuelson & Zeckhauser, 1988). It could be argued that the exploration of the influence of the number of options on participants’ preferences is an obvious strength of the research. Another strong point in the study is the focus on cognitive misperceptions for a possible explanation of the bias. Samuelson and Zeckhauser discovered that some participants tried to escape losses more than they sought to make gains. They called the phenomenon “loss aversion” and used it to show that this particular behavior contravenes utilitarian theory (Samuelson & Zeckhauser, 1988).

The scientists argued that the effect of loss aversion is associated with the tendency to set status quo as a reference point for making the evaluation of available options thereby connecting individual preferences to it. It is important to note that Samuelson and Zeckhauser also discovered that status quo bias is present even in the absence of framing towards gain versus loss decision (1988). This discovery let them conclude that even though there is a relationship between two phenomena, one cannot be entirely explained by the other. It can be argued that the major drawback of the paper is its inability to provide a single explanation for the status quo bias. Even though Samuelson and Zeckhauser, conducted several field studies, they were not able to disentangle multiple explanations of the behavioral preference for the existing state of affairs. Another weak point of the paper is the attempt to provide an explanation for status quo bias using the theory of anchoring. Even though, the scientists argued that people’s preferences are skewed towards those values that were initially presented to them, they failed to explain the quantitative importance of anchoring as a factor that influences the decision-making process.

Reference

Samuelson, W., & Zeckhauser, R. (1988). Status Quo Bias in Decision Making. Journal of Risk and Uncertainty, 1(1), 7-59.

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IvyPanda. (2020, August 1). “Status Quo Bias in Decision Making“ by Samuelson and Zeckhauser. Retrieved from https://ivypanda.com/essays/status-quo-bias-in-decision-making-by-samuelson-and-zeckhauser/

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"“Status Quo Bias in Decision Making“ by Samuelson and Zeckhauser." IvyPanda, 1 Aug. 2020, ivypanda.com/essays/status-quo-bias-in-decision-making-by-samuelson-and-zeckhauser/.

1. IvyPanda. "“Status Quo Bias in Decision Making“ by Samuelson and Zeckhauser." August 1, 2020. https://ivypanda.com/essays/status-quo-bias-in-decision-making-by-samuelson-and-zeckhauser/.


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IvyPanda. "“Status Quo Bias in Decision Making“ by Samuelson and Zeckhauser." August 1, 2020. https://ivypanda.com/essays/status-quo-bias-in-decision-making-by-samuelson-and-zeckhauser/.

References

IvyPanda. 2020. "“Status Quo Bias in Decision Making“ by Samuelson and Zeckhauser." August 1, 2020. https://ivypanda.com/essays/status-quo-bias-in-decision-making-by-samuelson-and-zeckhauser/.

References

IvyPanda. (2020) '“Status Quo Bias in Decision Making“ by Samuelson and Zeckhauser'. 1 August.

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