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Revisiting the Status Quo Bias: Replication of Samuelson and Zeckhauser (1988)

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Revisiting the Status Quo Bias: Replication of Samuelson and Zeckhauser (1988) Meta-Psychology, 2021, vol 5, MP.2020.2470, Open data: Yes Edited by: Rickard Carlsson https://doi.org/10.15626/MP.2020.2470 Open materials: Yes Reviewed by: Emil Persson & Nils Kobis Article type: Replication report Open and reproducible analysis: Yes Analysis reproduced by: André Kalmendal Published under the CC-BY4.0 license Open reviews and editorial process: Yes All supplementary files can be accessed at the OSF project Preregistration: Yes page: https://doi.org/10.17605/OSF.IO/WUPF4 Revisiting the status quo bias: Replication of Samuelson and Zeckhauser (1988) Qinyu Xiao Choi Shan Lam University of Hong Kong, Hong Kong Chinese University of Hong Kong, Hong Kong Muhrajan Piara Gilad Feldman Maastricht University, Netherlands University of Hong Kong, Hong Kong Status quo bias refers to people’s general preference to stick to, or continue with, a pre- viously chosen option. In two pre-registered experiments with U.S. participants re- cruited from the Amazon Mechanical Turk (n1 = 311, n2 = 316), we attempted to replicate four decision scenarios (Question 1, 2, 4, and 6) from Samuelson and Zeckhauser (1988), the seminal article that provided the first experimental demonstration of the status quo bias. We found strong empirical support for the status quo bias in three decision scenar- ios out of the four, including budget allocation (Scenario 1/Question 1 in the original ar- ticle), investment portfolios (Scenario 3/Question 2), and college jobs (Scenario 4/Ques- tion 4). However, we failed to find substantial support for the status quo bias in the wagon color choice scenario (Scenario 2/Question 6). We discuss the implications of our results and possible explanations using multiple accounts put forward in the status quo bias lit- erature. Keywords: status quo bias, judgment and decision making, replication People tend to favor things as they are. The sta- replications of the original study, as they differed tus quo bias refers to people’s general tendency to only in terms of physical settings and contextual stick with a previously chosen option in the face of variables (i.e., those that are beyond researchers’ other alternatives. In a seminal paper, Samuelson control; please refer to Figure 2S and Table 12S in the and Zeckhauser (1988) surveyed participants with supplementary for details regarding the criteria and hypothetical decision questions. They found that the classification). Our goal was to revisit these clas- framing an option as the status quo resulted in a sic findings, to examine whether they withstand the higher choice rate of that option, compared with test of time, and to accumulate further evidence to framing it neutrally or as an alternative to the status try and establish more precise effect size estimates quo (or non-status quo). Further supplementing the (Nosek & Lakens, 2014). We begin by introducing the experimental results with field evidence, they literature on the status quo bias and the chosen ar- demonstrated that the status quo bias is pervasive ticle for replication, i.e., Samuelson and Zeckhauser and profound in people’s decision-making. (1988). We then highlight the motivation for the cur- In this article, we report two attempts to repli- rent replication study, present the results, and dis- cate Samuelson and Zeckhauser (1988). Based on cuss their implications. LeBel et al.’s (2018) criteria for evaluating replica- tions, we classified our experiments to be very close XIAO, LAM, PIARA, & FELDMAN 2 Status quo bias models, which states that only preference-relevant features matter in choosing among alternatives Samuelson and Zeckhauser (1988) were the first (Samuelson & Zeckhauser, 1988). Economists once to demonstrate the status quo bias using controlled assumed that decision makers have well-defined experiments. In part of their investigation, they pre- and relatively stable preferences and make decisions sented a series of hypothetical decision-making accordingly (Kahneman et al., 1991). These prefer- scenarios and asked participants to choose among ences are determined by the overall value of options several available options. The scenarios and options for a decision maker (i.e., utility) after the decision came in two versions: in the neutral version, all op- maker evaluated those features of their concern. tions were presented equally as they were, without Once their preferences are set, the decision maker any framing, whereas in the status quo version (SQ), will go for the option with the highest expected util- one option was framed as the status quo and the ity, ignoring those preference-irrelevant variables. other options were reframed either as a change or For instance, the order in which the options are pre- in reference to the status quo option. The options sented or the labels they carry (e.g., a label of being were effectively the same in both versions. the status quo) should not influence the decision. Samuelson and Zeckhauser (1988) found that op- Conversely, if we know a decision maker’s choice tions were chosen more often when framed as the among several options, we can confidently infer that status quo, compared with when they were framed the chosen option has the highest expected utility as an alternative to the status quo or without any for, and hence preferred the most by, that person. framing. The status quo framing consistently led to We can infallibly predict that the same option will be the highest rate of choice, followed by the neutral chosen regardless of, e.g., how the available options framing and then by the non-status quo framing. are presented, if there is no alternative with a higher Additionally, they showed that preference for status expected utility. quo options became more pronounced as the num- This assumption no longer holds in the case of ber of options increased (see also Tversky & Shafir, the status quo bias. Samuelson and Zeckhauser 1992; Redelmeier & Shafir, 1995). (1988) showed that a status quo can drastically influ- People may sometimes be willing to continue ence decision makers’ choices. An option chosen with the status quo despite its lower utility com- when framed as the status quo may no longer be as pared to available alternatives (e.g., Suri et al., 2013). preferred when framed as a non-status quo, despite For instance, Samuelson and Zeckhauser (1988, p. 10) that available options all remained the same. The described a case where a small town in Germany implications of their results are profound, if we con- was to be relocated due to a mining project. The au- sider how often in real life we make decisions where thority offered the townspeople several planning there is a status quo. Arguably, continuing with the options for the new town, which would be estab- current choice or situation is almost always an op- lished at the authority’s expense. Surprisingly, the tion. townspeople opted for a plan quite much like that of Indeed, empirical evidence so far suggests that the old town. The intricate layout of the old town the status quo bias has a great influence in real life that had evolved through centuries was unlikely to judgment and decision-making. Unlike the experi- be efficient in modern times. Nonetheless, people ments by Samuelson and Zeckhauser (1988, Part chose it, arguably because of their preference for One), where options became the status quo because the status quo. Apparently, the status quo bias vio- they were so framed, studies on the status quo bias lates one of the foremost assumptions in rational in real life involved actual past choices. For instance, decision-making theory that people aim to maxim- Samuelson and Zeckhauser (1988) went to the field ize expected utility and minimize loss (Tversky & to examine the choice of health insurance plans by Kahneman, 1991). Should this assumption have held, Harvard employees and the allocation of retirement the townspeople would have been happy to see their contributions to different funds by faculty through- new town be built using modern knowledge of city out the U.S. Again, evidence pointed to a prominent planning but not as a legacy of centuries’ history. status quo bias: Harvard employees tended to stick The status quo bias challenges yet another, more with the insurance plan they initially chose, despite specific assumption in rational decision-making the presence of a more attractive option. Teachers REVISITING THE STATUS QUO BIAS 3 across the States tended to maintain one allocation like a series of revolutions rather than an incremen- ratio towards different retirement funds, though a tal accumulation of small advances (Kuhn, 2012). change was easy and bore almost no cost. Similarly, New policies are hard to establish, and old ones are Hartman et al. (1991) surveyed around 1,500 con- hard to abolish. A well-received scientific paradigm sumers in the U.S. on the reliability and rate of their could dominate researchers’ attention and re- electricity service. The researchers found that sources for years and even decades. In sum, our ev- around 60 percent households, regardless of the ac- idence and theoretical conjectures imply that the tual reliability of the services they received, indi- status quo bias is pervasive in economic, scientific, cated that they preferred the status quo the most (p. social, and cultural decision-making situations. 149). Johnson and colleagues (1993) looked into the automobile insurance industry in New Jersey and Explaining the status quo bias Pennsylvania, where different status quos were pre- sent. They found that when given an option to lower Numerous accounts have been put forward to insurance rates by reducing the right to sue, 75% of explain the status quo bias. They fall roughly into Pennsylvanians chose to retain their full right; in two categories. Some attempted to accommodate contrast, when given an option to obtain the full the bias into a rational decision-making framework, right to sue by paying higher rates, only 20% of arguing that the seemingly irrational preference for those in New Jersey chose that option (p.
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