![]() ![]() Repeated exposure gives familiarity and attachment People may simply not want the hassle of changing.ĥ. This suggests that with more choices the cost of making decisions rises, making the status quo more attractive. Interestingly Samuelson, W., & Zeckhauser (1988) found a preference for the status quo was greater with more choices. Going to Starbucks (what you are used to) reduces worry over making a choice. Going to an independent shop means you have to be more careful in trying to evaluate the quality – it could be better or worse. ![]() If you go to a foreign city, Starbucks offers a reliable experience. It could be better, but it could be worse. Suppose every day you drink at Starbucks. Psychologically people may express a feeling of ‘better the devil you know.’ In other words, people dislike uncertainty and are risk-averse at making a choice. In other words, people’s loss aversion encourages them to stay with what they have. ![]() Prospect theory of Kahneman and Tversky (1992) shows that people felt the loss of what they had more than they felt equivalent gains. We become attached to our current situation and goods. In behavioural economics, we can observe a preference for people to give a higher weighting to what they already have. In blind testing, preference for strong brands like Coca Cola or Budweiser is much lower than when people chose brand they recognise. Sticking with established brands is an example of status quo bias. Citizens were offered many plans for a new town, but citizens voted for a plan which closely resembled the old town with an inefficient serpentine look which had evolved for no rhyme or reason over the years. In Germany, a small town had to be relocated due to a mining project.
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