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Is Status Quo Bias Consistent With Downward Sloping Demand?

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  • Wittman, Donald

Abstract

We show that status-quo bias combined with downward-sloping demand implies addictive behavior. This result does not depend on transitivity, a complete ordering, or even the existence of a preference relation that rationalizes choices.

Suggested Citation

  • Wittman, Donald, 2005. "Is Status Quo Bias Consistent With Downward Sloping Demand?," Santa Cruz Department of Economics, Working Paper Series qt2rk9t2ck, Department of Economics, UC Santa Cruz.
    • Handle: RePEc:cdl:ucscec:qt2rk9t2ck
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    References listed on IDEAS

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    1. Botond Kőszegi & Matthew Rabin, 2006. "A Model of Reference-Dependent Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1133-1165.
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    5. Sagi, Jacob S., 2006. "Anchored preference relations," Journal of Economic Theory, Elsevier, vol. 130(1), pages 283-295, September.
    6. Michael Mandler, 2004. "Status quo maintenance reconsidered: changing or incomplete preferences?," Economic Journal, Royal Economic Society, vol. 114(499), pages 518-535, November.
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    8. Munro, Alistair & Sugden, Robert, 2003. "On the theory of reference-dependent preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 50(4), pages 407-428, April.
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    More about this item

    Keywords

    Status quo bias;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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