Franklin

Status quo and omission effects in repeat choice : experimental and empirical evidence / Maurice E. Schweitzer.

Author/Creator:
Schweitzer, Maurice E.
Publication:
1993.
Format/Description:
Microformat
xi, 177 leaves : ill. ; 29 cm.
Local subjects:
Penn dissertations -- Managerial science and applied economics.
Managerial science and applied economics -- Penn dissertations.
Summary:
Samuelson and Zeckhauser (1988) first articulated the status quo bias as the bias for maintaining the current state of affairs. Ritov and Baron (1990) found that these status quo results could be explained by the omission bias--a bias favoring inaction. According to Ritov and Baron's findings the original status quo phenomena were almost entirely accounted for by the omission bias. We disentangle these effects, establish the existence of the status quo bias beyond the omission bias, and investigate the operation of both biases. Much of this work explores the status quo and omission biases within the context of benefits decisions.
The first questionnaire study involved sixty student subjects. Results from this study demonstrate that both the status quo and omission biases occur. In this experiment, these effects appeared to be additive, and subjects exhibited these biases unknowingly. While the effects elicited in this study were not strong, they were demonstrated in an extremely transparent setting.
The second study examined 239 (60% of the target sample of) University of Pennsylvania employee responses to a mailed questionnaire. In this experiment 62 (26% of our) subjects chose the status quo option even when the status quo choice was much higher or much lower than the normative benchmark. Seven additional subjects also committed a second type of status quo bias by responding with their personal status quo as defined by their own history. The omission bias did not affect responses, although other factors such as mental accounting appear to influence these decisions.
Using historical data, we examined University of Pennsylvania employee benefits decisions from 1987 to 1992. Repeat choice and default trends characterize these decisions, and results from a natural experiment suggest that the status quo and omission biases may play an important role in these decisions.
In describing the status quo and omission biases, we discover that it operates within a broad context of factors. We discuss the role of some of these factors as they mediate these effects, and we consider prescriptions for restructuring individual choice problems.
Notes:
Supervisor: John C. Hershey.
Thesis (Ph.D. in Managerial Science and Applied Economics) -- Graduate School of Arts and Sciences, University of Pennsylvania, 1993.
Includes bibliographical references.
Local notes:
University Microfilms order no.:94-13905
Contributor:
Hershey, John C., advisor.
University of Pennsylvania.
OCLC:
187455762
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