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Decision Time, Consideration Time, And Status Quo Bias

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  • Sen Geng

Abstract

type="main" xml:id="ecin12239-abs-0001"> Economists increasingly appreciate the value of studying the time taken to make decisions in order to provide insights into decision makers' choices. This article shows that studying how time is allocated among individual options is also valuable in helping researchers to understand the impact default options have on decision makers' attention allocation, as approximated by how the time is allocated. The study of this impact generates new insights into the well-known choice phenomenon of status quo bias, which typically refers to decision makers' tendency to stick to a default option. By designing a series of novel experiments, I find that this bias arises even when the choice is among prizes of fixed monetary value expressed in arithmetic form. I also find asymmetric attention (i.e., more time devoted to default options) and strikingly asymmetric choice errors; specifically, decision makers fail to select an alternative better than the default 28% of the time, while they incorrectly select an alternative worse than the default only 11% of the time; and provide evidence supporting a causal relationship between asymmetric attention and asymmetric errors. (JEL D03, D12, D83)

Suggested Citation

  • Sen Geng, 2016. "Decision Time, Consideration Time, And Status Quo Bias," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 433-449, January.
  • Handle: RePEc:bla:ecinqu:v:54:y:2016:i:1:p:433-449
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    File URL: http://hdl.handle.net/10.1111/ecin.2016.54.issue-1
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    Cited by:

    1. repec:eee:jfpoli:v:85:y:2019:i:c:p:15-27 is not listed on IDEAS
    2. Wiebke Roß & Jens Weghake, 2018. "Wa(h)re Liebe: Was Online-Dating-Plattformen über zweiseitige Märkte lehren," TUC Working Papers in Economics 0017, Abteilung für Volkswirtschaftslehre, Technische Universität Clausthal (Department of Economics, Technical University Clausthal).
    3. repec:kap:fmktpm:v:32:y:2018:i:2:d:10.1007_s11408-018-0311-x is not listed on IDEAS
    4. repec:eee:jeborg:v:144:y:2017:i:c:p:238-257 is not listed on IDEAS
    5. repec:eee:joepsy:v:69:y:2018:i:c:p:61-86 is not listed on IDEAS
    6. repec:eee:jetheo:v:169:y:2017:i:c:p:93-127 is not listed on IDEAS

    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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