Status Quo Bias Research Articles

The Influences Of Status Quo And Endowment Biases On Earnings Management

This study investigates the effects of status quo and endowment biases on earnings management behaviors. This research conducts a survey method in 2018. The sample comprises of 74 accounting students at a business school in Indonesia. The main variables are measured by questionnaires with 1 to 7 scale. The hypotheses are examined by multiple regression technique. The findings reveal that status quo and endowment biases positively influence earnings management actions. This research provides two contributions. This study attempts to link status quo and endowment biases to earnings management behaviors. This contributes additional theoretical explanations of earnings management behaviors among accountants. Research conclusions can be utilized to determine the suitable psychological aspects of accountants for earnings management decisions.

Choice with Endogenous Categorization

Abstract We propose and axiomatize the categorical thinking model (CTM) in which the framing of the decision problem affects how agents categorize alternatives, that in turn affects their evaluation of it. Prominent models of salience, status quo bias, loss-aversion, inequality aversion, and present bias all fit under the umbrella of CTM. This suggests categorization is an underlying mechanism of key departures from the neoclassical model of choice. We specialize CTM to provide a behavioural foundation for the salient thinking model of Bordalo et al. (2013, Journal of Political Economy, 121, 803–843) that highlights its strong predictions and distinctions from other models.

Sharing the Economic Torment due to COVID – 19 and Pertinent Behavioural Biases on Financial Risk Resilience Ability of Security Market Investors

Behavioural inclinations depict a replicable example in perceptual mutilation, mistaken judgment, unreasonable understanding, or what is extensively called mindlessness. This paper embraces an essential information way to deal with explore the impacts of behavioural predispositions due to Covid-19 on security market performance in India. The destinations are in twofold: one, to analyze the degree of behavioural predispositions among security market investors in India and, to look at the impacts of social inclinations on securities market in India. The paper utilized questionnaire as instrument and the strategy of correlation with Pearson Coefficient to examine a review of 150 haphazardly chose investors in India's security market. There is a solid proof that behavioural inclinations exists overwhelmingly due to COVID - 19 in the security market in light of the fact that a feeble negative relationship exists between social predispositions and securities exchange market in India. The biases due to behaviour include Confirmation bias, Reducing Regret bias, Myopic loss-aversion bias, Limited attention span bias, Chasing Trends bias and Status quo bias. The paper suggests that individual financial specialists in the market ought to connect with the administrations of investment advisors which will diminish individual inclinations in the administration of their portfolios.

Biased experts, majority rule, and the optimal composition of committee

An uninformed principal appoints a committee of experts to vote on a multi-attribute alternative, such as an interdisciplinary project. Each expert evaluates one attribute and is biased toward it (specialty bias). The principal values all attributes equally but has a status quo bias, reflecting the organizational cost of a change. We study whether the principal would compose the committee of more or less specialty-biased experts. We show that her optimal composition is nonmonotonic in the majority rule, with the most biased experts appointed under intermediate rules. We then show that the principal would be less concerned about the committee composition if its members can be uninformed, as they induce the informed to vote less strategically. Surprisingly, although uninformed members lower the quality of the committee's decision, the principal may prefer to have some when its composition is suboptimal, and the majority rule is sufficiently extreme, such as the unanimity.

Organised interests in the media and policy congruence: The contingent impact of the status quo

AbstractWhile a multitude of studies have investigated the link between opinion and policy, we have little knowledge of how and when organised interests affect this linkage. We argue that the alignment of organised interests affects opinion–policy congruence by influencing the weight decision‐makers attach to citizen preferences. Moreover, we propose that alignment between majorities of groups and the public matters the most when status quo bias must be overcome for the public to obtain its preferred policy. We test our theoretical claims drawing on a comprehensive media content analysis of 160 policy issues in Germany and Denmark. Our results present a more sceptical picture of the ability of groups to suppress the opinion–policy linkage than the one frequently presented in the academic literature and public debate. We find that the capacity of groups to affect whether policy is congruent with the majority of the public is restricted to situations where the public supports a change in the status quo. In these cases, policy is less likely to end up reflecting public opinion if the majority of interest groups do not support the public position. In cases where the public is supportive of the policy status quo, the position of interest groups does not affect the likelihood that policy will eventually reflect the preferred position of the public. Our findings expand existing knowledge of organised interests in the study of policy representation and have important implications for understanding democratic governance.

Why do faculty resist change?

This article was migrated. The article was marked as recommended. Background: Much of what an educator needs to know to be successful is invisible to lay observers, leading to the assumption that teaching requires little formal study. Aims: This study is based on an 8- month faculty development workshop on student-centered teaching. Faculty members who made no noticeable changes in their teaching practices were compared to faculty who made noticeable and significant changes. Method: Using a qualitative narrative approach based on a structured interview we aimed to categorize the features of changers and resisters. Results: Faculty resisters did not see any need for changes in the way we teach, did not believe student-centered teaching to be more effective, could not appropriately define student-centered teaching, were motivated by extrinsic factors, and felt unvalued. Conversely, faculty changers were excited for changes and saw the need for change and for student-centered teaching, were intrinsically motivated, and felt valued as faculty members. Conclusion: We hypothesize that a main reason for resistance is the status quo bias. Implications for faculty development are discussed.

The Weight on Earnings in Incentive Contracting: Dynamic Response or Status Quo?

As firms evolve, the tasks required to generate firm value change, as does the ability of earnings to reflect changes in that value. To the extent earnings differentially captures managers’ effort toward desire tasks, contracting theory suggests its role in incentive pay should also change. However, anecdotal evidence suggests boards often fail to alter the weights on earnings in response to changes in the firm over time, relying instead on the status quo. In this study, we use a large longitudinal sample research design to investigate whether and how boards alter the weight on earnings in bonus contracts as its contracting usefulness changes over time. Our results suggest that although some contract evolution occurs, it often lacks timeliness. We find that boards often rely on contracting decisions made in prior periods, suggesting evidence of the status quo bias. Consistent with the status quo bias affecting board decisions, we document that process accountability mitigates a lack of concurrent contract evolution with shifts in firm evolution. Finally, we show that firms trade off earnings for other more idiosyncratic performance measures, suggesting alternate measures incrementally inform manager effort in early and late stages of firm development.

Random Utility Models with Status Quo Bias

Random Utility Models with Status Quo Bias

Depolarizing the COVID-19 Vaccine Passport

Vaccine passports are the latest hotly debated and highly polarizing issue in U.S. politics. Many experts consider them a key tool to safely restart the economy, while increasing vaccine take-up. However, just as many consider vaccine passports unfair and a threat to individual liberties and privacy. Yet vaccine passports are not as new as some commentators suggest. Proof of vaccination has long been required both to engage in some activities on the U.S.soil and to travel internationally. We carry out an online experiment with a sample of approximately 3200 Americans to investigate whether flagging that vaccine passports are not a novel idea can: i) increase the support for the COVID-19 vaccine passports; ii) lead more people to state that they intend to get vaccinated if a COVID PASS is introduced; iii) depolarize the views on the COVID PASS. We find strong evidence that this is possible. Our results are statistically significant and robust to a battery of controls. Moreover, our results suggest that the status quo bias can be an effective tool to depolarize a clearly identifiable set of issues.

The Ethics of Research That May Disadvantage Others.

In prospective interventional research, a treatment may provide an advantage for the recipient over other people who do not receive it. If the intervention proves successful, the treated are better able to compete for such things as a scarce ventilator, a class grade, or a litigation outcome, potentially risking the deaths, jobs, or incomes of nontreated persons. Discussions of ethical concerns related to "bystanders" have typically focused on direct harms (such as infecting them with a virus), rather than the competition for a rivalrous good (such as a ventilator or clinical outcome). After broadly scoping this problem of advantage, this article reveals several reasons that such interventional research is typically permissible, notwithstanding the potential setbacks to nonparticipants. I consider the almost-dispositive concept of clinical equipoise and then glean insights from the harm principle, status quo bias, the leveling-down problem, and a potential bias against prospective interventional research versus program interventions with retrospective study. My consideration of institutional relationships does not change the analysis that such research is permissible.

IoT Marketplace: Willingness-To-Pay vs. Willingness-To-Accept

Willingness-To-Pay (WTP) is the most a person is willing to pay for a good or service. Conversely, Willingness-To-Accept (WTA) is the minimum amount a person is willing to accept for giving up a good or service. People often attribute a higher value for privacy in the WTA condition when compared to the WTP condition. In behavioral economics of privacy and security, this discrepancy between WTP and WTA has been explained by the endowment effect and the status-quo bias. In this study, we aim to emulate the effects of WTP and WTA through interface design. Specifically, we employed the principles of status-quo bias to build two versions of the IoT Marketplace. While one design of the marketplace emulated the WTA condition, the other emulated the WTP condition. In both versions of the marketplace, we communicated the aggregate privacy rating associated with the IoT device using the same indicator. We evaluated the effect the two interfaces had on product selection by conducting a study where participants were asked to purchase an IoT device using either a WTA interface or a WTP interface. Our results show that participants using the interface that emulated the WTA condition were more likely to pay a premium to purchase devices with a higher privacy rating when compared to the participants using the interface that emulated the WTP condition. We also append results showing that when asked to select items without making the purchases the same effect was more pronounced.

The impact of loss aversion on optimal prevention

We analyze how loss aversion affects prevention in Koszegi and Rabin's (2007) choice-acclimating personal equilibrium. Individuals take into account the financial consequences of prevention but also expected sensations of disappointment or elation against a stochastic reference point. Loss aversion raises optimal prevention if the loss probability is below a threshold value and lowers it otherwise. We characterize this threshold and find that, under plausible conditions, it is large enough for the positive effect to dominate. We also introduce a status-quo bias, which makes individuals more sensitive to the occurrence of a loss. The status-quo bias increases the probability threshold, making the positive effect of loss aversion on prevention even more prevalent.

Understanding the dual role of habit in cross-channel context: an empirical analysis of mobile payment

Taking mobile payment services as example, this study develops a model to examine how consumers' habit of using internet services affects their evaluation and extension intention of mobile channel based on trust transfer mechanism and status quo bias theory. The results of our study reveal that internet payment habit has two opposite influences on consumers' mobile payment use intention in the cross-channel context, which are demonstrated as push and pull mechanisms, and the two mechanisms play different roles in different stages of consumers' channel extension process. Moreover, the two promotion strategies, namely direct promotion and indirect promotion, are also examined to compare and contrast their effects on consumers' extension intention of mobile payment.

Choosing to vote as usual

In the United States, there is a growing momentum towards ranked choice voting. In this study, we conducted two independent yet complementary surveys to examine which voting system citizens prefer, one with the real candidates in the states holding Super Tuesday Democratic primaries and one with fictitious candidates in the whole country. In both surveys, respondents were invited to vote using four different voting rules – single, approval, rank, and point (score) – and then asked how satisfied they were using each system. In both studies the single vote remains the most preferred voting method. We find that citizens’ views are strongly correlated with age, with the eldest being much more favorable to the single vote. Surprisingly, these views do not vary across education levels. Finally, those who have had personal experience with ranked ballot are more positive towards ranked voting, which suggests the presence of a status quo bias.

The Status Quo Bias of Students and Reframing as an Educational Intervention towards Entrepreneurial Thinking and Change Adoption

The purpose of this research study is to examine the status quo bias and reframing interventions among business students in an attempt to understand their role in the students’ entrepreneurial decision making, aiming eventually to find out whether we can affect students’ entrepreneurial thinking by using an educational intervention towards innovation and change adoption. Though these research topics have previously been examined separately and mostly in a non-entrepreneurial context, this research paper aims to integrate them into one laboratory experiment study in an educational context, considering business students at the university. The experimental study is conducted on a sample with more than 200 undergraduate university students in their third or fourth year of studies of the Management study program at the Ss. Cyril and Methodius University in Skopje. Overall, we find that students are significantly biased towards status quo in 7 out of 18 cases, demonstrating a moderate level of status quo bias. The results from the second part of our study evidence a strong effect of the reframing intervention on overcoming the status quo bias. In any case, the research paper adds a unique practical contribution by offering an actual entrepreneurship learning approach, as an intervention towards the innovation and change adoption among students at business schools and universities.

IS STATUS-QUO BIAS INDEPENDENT FROM PERSONALITY TRAITS DURING THE ECONOMIC DECISION-MAKING PROCESS?

Bireylerin iktisadi kararlarında rasyonel davrandıklarını varsayan klasik görüşe karşın, davranışsal iktisatçılar bireylerin kararlarında rasyonel davranmayabileceklerini göstermiştir. Bu rasyonel olmayan davranışlar kişilere özgü farklılıklar içerebilir. Bireylerin iktisadi kararları üzerindeki bu farklılığı açıklamak için kişilik özellikleri ve statüko davranışı ilişkisinden yararlanılmıştır. Araştırmanın amacı bireylerin kişilik özelliklerinin, statüko davranışı açısından farklılaşıp farklılaşmadığını incelemektir. Kişilik özelliklerini belirlemek amacıyla Sıfatlara Dayalı Kişilik Testi (SDKT) uygulanmıştır. Statüko yanlılığı ölçümü için Samuelson ve Zeckhauser tarafından oluşturulan anket kullanılmıştır. Araştırma sonucunda deneyime açık kişilik özelliği ile statüko arasında anlamlı bir ilişki tespit edilmiştir. Bireylerin deneyime açıklık düzeyleri arttıkça statükodan uzaklaştıkları gözlenmiştir. Diğer taraftan dışa dönük bireylerin statükodan uzaklaştıkları da dikkat çekmektedir. Literatürde iktisadi kararlarda dışa dönük ve deneyime açık bireylerin daha yüksek karlılık düzeyine sahip oldukları vurgulanmaktadır. Bu durum statüko yanlılığından uzaklaşmaları ile açıklanabilir. Bireylerin statüko eğilimini doğru analiz edip, kişilik özelliği ile uyumlu iktisadi davranış göstermek karlılığı da arttırıcı bir faktör olarak ortaya çıkabilecektir.

Understanding how and when user inertia matters in fitness app exploration: A moderated mediation model

Information behavior for health and fitness have attained increasing attention in the e-health field. However, mobile users still need exploring a largely untapped resource on fitness apps to obtain more health benefits. Regarding that prior studies seldom focused on which factor hinders fitness app exploration, this study proposes a moderated mediation model to investigate the mechanisms underlying users’ intention to explore fitness apps (IEFA) based on status quo bias theory and goal-setting theory. This model stresses on the mediation effect of perceived need and the moderating effect of health goal. Data from 346 respondents in China were used to examine the hypotheses proposed in the research model and further to verify the moderated mediation model. The results indicate that users’ inertia negatively influences both perceived need and IEFA, and perceived need not only has a positive influence on IEFA, but also mediates the relationship between inertia and IEFA. In addition, health goal weakens the relationships between inertia and perceived need as well as between inertia and IEFA. This study extends the knowledge of information behavior in the mobile health field and enriches literature of status quo bias and health goal-setting. It also discusses practical implications for fitness app providers.

"Status quo" w podejmowaniu decyzji finansowych

Status quo jest ważnym efektem występującym w procesie podejmowania decyzji. Badacze określają w ten sposób nieświadome podtrzymywanie stanu bieżącego i niechęć do zmian. W niniejszym artykule w wyniku badania założone hipotezy nie zostały całkowicie potwierdzone. Zauważono statystycznie istotną zależność między grupą neutralną a grupą, w której status quo występował przez 3 miesiące, co mogłoby potwierdzić założone hipotezy o uleganiu temu efektowi. Kolejny wynik grup ze status quo – 3 miesiące oraz status quo – 20 lat przeczy wpływowi czasu na podatność na heurystykę. Rezultaty badania mogą wynikać z czynników, które jednocześnie stanowią istotne wskazówki dla badaczy zainteresowanych tą tematyką.

Behavioral Anomalies and Energy-related Individual Choices: The Role of Status-quo Bias

The literature on the energy-efficiency gap discusses the status-quo bias as a behavioral anomaly that potentially increases a household’s energy consumption. We empirically investigate the extent to which the status-quo bias is linked to residential electricity consumption through two channels: non-replacement of old appliances and overuse of appliances. Using data from a large household survey conducted in three European countries, we find that our measure of status-quo bias is a significant predictor of both the age of home appliances and the level of a household’s consumption of energy services. This is also reflected in the total electricity consumption, which is found to be around 6% higher when the household head is status-quo biased. We thus provide empirical evidence that the status-quo bias may represent a substantial barrier to increasing residential energy efficiency. Our findings prompt policy makers to design instruments that take this barrier into account.

What is a habit? Diverse mechanisms that can produce sustained behavior change

In the literature on behavior change it has commonly been assumed that sustained changes in behavior means that habits have been formed and that sustained behavior change is achieved through the formation of habits. In this paper we argue that habit formation is often confused with a variety of alternative mechanisms through which sustained changes in behavior can be achieved. These include: learning, information acquisition, status quo bias, taste discovery, technology, commitment devices, social influences, and concomitant changes to choice environments. Understanding these mechanisms is important for determining why specific interventions work or don’t work and for aiding in the design of more effective mechanisms for inducing sustained behavior change.