The status quo bias and its individual differences from a price management perspective

Setting the “right†price essentially remains an empirical question. The issue is especially problematic owing to pricing managers' proclivity to impose subjectivity into their analyses. For instance, people tend to have biases in complex or uncertain situations, contexts with information overload, and circumstances with time pressure—all which are common in the price management process. In this paper, we examine why a status quo bias plays a significant role in price management and why it explains the gap between the theoretical and practical sides of price management. Because the actions of organizations are the result of individual actors' activities, we adopt a micro-foundations perspective on price management in our studies. We explore the status quo bias in price management in four quantitative experiments, as well as the possible moderation impact of three of the Big Five personality traits (extraversion, conscientiousness, and openness) and the locus of control. Moreover, we investigate the influence of decision makers’ self-interest—in the form of a monetary bonus—on their susceptibility to the status quo bias. In addition to a significant main effect of the status quo bias in all four experiments, we show that conscientiousness and internal locus of control, as well as the presence of a self-interest, significantly moderate susceptibility to the status quo bias.