Topics
Status Quo Bias
Status quo bias is a cognitive bias that describes people's tendency to prefer things to stay the same or to resist change, even when alternatives or new options might be equally or more beneficial. This bias can influence various aspects of decision-making, behaviour, or policy. Here are some examples of status quo bias:
- Retirement savings: People often stick with their default retirement savings options or allocations, even when better options are available, due to the status quo bias. For example, employees may continue to invest in their company's default retirement plan or fund, even if other options offer higher returns or lower fees.
- Health insurance: People may stay with their current health insurance plan or provider, even when better options are available, due to the status quo bias. This can lead to suboptimal coverage or higher costs.
- Investment portfolios: Investors may be reluctant to rebalance their portfolios or adjust their investment allocations, even when market conditions or their financial goals change, due to the status quo bias. This can lead to suboptimal investment returns or increased risk.
- Product choices: Consumers may stick with familiar or existing products, even when better or more innovative options are available, due to the status quo bias. This can limit their ability to discover new or improved products or services.
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