Status Quo Bias

Succumbing to the status quo bias might be a sign that you are not putting enough effort into making decisions. While this helps free up mental resources for other tasks, it means that we don’t necessarily make important choices based on sound reasoning. Always sticking to the default option leads us to miss out on opportunities that could have helped us otherwise. For example, if Sam had looked into her mother’s health insurance and discovered that she was already covered, she could have saved hundreds of dollars by unrolling from her school’s plan. However, her inaction leads her to lose money, and maybe even miss out on better coverage.

On the outside, it seems like the status quo bias contradicts the action bias: our preference to do anything instead of nothing, even when holding out is more advantageous. While it’s true that sometimes the default option is inaction, other times, the default option involves deliberate effort. In other words, the status quo bias often causes the action bias, rather than contradicts it.

For example, most soccer goalies either jump to the left or right during penalty kicks, when they are statistically more likely to make a save by standing still.1 But as a goalie, the default option is to jump. Everyone else does it, so why shouldn’t you?  In this case, our tendency to view action as the norm leads us to the action bias. Just as with passivity, making unnecessary moves can also result in negative outcomes, such as failing to make a save.

The status quo bias is inherently a systematic issue. After all, it is systems that establish norms for individuals, not the other way around. We accept organizations as fixed entities and happily work within their structure, forgetting to question why things are the way they are, or more importantly, how things could be better.

Think about it: why do we work five days a week—more specifically, nine to five, Monday through Friday? This set-up is not a natural law but a social construct in the workforce for as long as anyone can remember. However, many studies suggest that a four day work week might increase overall productivity, giving employees an extended chance to rest and recharge.¹⁰ Although the research is convincing, many companies may resist making these changes, wanting to keep things the same as they’ve always been. If we deviate from outdated arrangements, we can improve many systems to benefit the individuals existing within them.

But it gets worse: the status quo bias makes it difficult for individuals to accept institutional changes, even when they are for the better. For instance, many companies are taking diversity and equity initiatives (DEIs) to create a safe and balanced workplace, such as hiring more candidates from minority groups or requiring workshops to discourage implicit prejudices. While organizations intend for these initiatives to benefit employees, many employees are skeptical of these initiatives—not because they oppose equality, but because they oppose change. This hesitancy makes it difficult to challenge existing hierarchies and redistribute power within organizations, even when organizations try to do this themselves.

The status quo bias encourages brand loyalty: where we continue using the same products from the same companies—even when better alternatives arise. Many companies exploit this tendency as a marketing tactic, integrating new features into their design without worrying too much about their customer base shrinking. Although this is not what the user originally signed up for, it is so much easier to stay with the same product than intentionally find a new one.

For example, Netflix decided to crack down on people sharing their passwords with friends and family by introducing a new policy where only users living together can share an account. Anyone living outside the household now must pay an additional $7.99 a month.¹¹ Despite the media backlash surrounding this decision, Netflix has held strong. They know that many of their users will remain loyal and even pay the additional fees simply because they don’t want to pick out a new streaming service. There are too many options out there, so why not stick with the same?

To no surprise, the status quo bias sparks resistance to implementing AI technologies in the workforce. Organizations operate in specific ways that can be scary to stray from, even when machine learning could help enhance productivity and make better decisions. And even when a company finally gives in, adopting AI may be slower than expected if employees use software to mirror existing processes rather than exploring new, potentially more effective solutions. This could limit the potential benefits of AI, as it may just automate existing practices rather than innovate or optimize them.

With this in mind, we should strive to keep up to date on the best ways to incorporate machine learning to streamline processes rather than sustain stagnation.

Social psychology has identified two reasons why the status quo bias happens when making decisions. First, we prefer the norm because of two other cognitive biases: loss aversion and regret avoidance. Second, we prefer the norm to avoid feeling overwhelmed by our choices, each plagued with uncertain outcomes.

Loss aversion and regret avoidance

Loss aversion is a behavioral economics theory denoting that the psychological pain we experience from a loss is significantly greater than the pleasure we experience from an equal gain. This imbalance prevents us from selecting the best option out of fear of failure.

When choosing between the default option and its alternatives, we treat the status quo as a reference point because we know exactly what to expect from it. On the other hand, choosing an alternative would be taking a risk, since its outcome is uncertain. This is where loss aversion comes into play: when considering the other options, we assign greater weight to potential losses rather than potential gains. In this way, we are biased in favor of the status quo, and inclined to stick with it no matter what.³

Another concept related to the status quo bias is regret avoidance, which posits that we take action to avoid feeling regret about not doing it later.⁴ This tendency reinforces our misconception that adhering to the norm is the “safe thing” to do, as it is less likely to leave us feeling like we missed out. 

For example, after graduating high school, we may choose to go to college simply because everyone else does. Plus, we may regret not learning valuable knowledge or making lifelong friends if we don’t go. But for some people, entering the workforce might make more sense to save money and learn a different subset of skills. However, their inclination to follow the status quo—combined with their fear of missing out—leads them to not even consider this as an option. 

Decision-making can be overwhelming

There is a reason why we resort to the status quo bias, even if it sometimes leads to bad decisions. When given a choice, it is not always obvious what the correct option is. If we feel stressed and overwhelmed, sometimes it is easiest to go with what we know.

Early research illustrates that the strength of the status quo bias is positively correlated with the number of options in a choice set.⁵ Put simply, the more we have to choose from, the more likely we are to fall back on the norm.

We can explain this pattern using choice overload, which asserts we make worse decisions when given too many options.⁶ In fact, the status quo bias may not be a form of decision-making at all, but rather a form of decision avoidance.⁷ After all, we are not even considering our other options, and only choosing the default to escape the stress of actually making a decision.

Although this strategy is dangerous for important choices, it may be useful during everyday tasks.  While grocery shopping, it’s far easier to choose the same loaf of bread you always get rather than evaluating every other variety and brand. Not only does this save you time, but frees up mental resources. In this case, the status quo bias allows you to minimize deliberation costs and dedicate your energy to greater tasks.⁸ 

We need norms. The status quo provides a sense of stability to help us develop our understanding of ourselves and the world around us. How could we navigate our lives if everything was always in constant flux?

The same thing goes for when we make decisions. It makes sense for us to follow patterns that evolve into routines, whether that be the clothing we wear or the breakfast we eat. In these daily tasks, defaulting to the status quo is okay to help save our mental energy for the decisions that matter.

However, it is important to remember: no innovation ever happens from sticking to norms. Instead, we can only grow and develop by breaking free from the status quo and discovering surprising possibilities we would have never encountered otherwise. This is true both on an individual level, such as discovering a new career path, and a societal level, such as discovering a new system to replace outdated ones.

Yes, it’s true that new is scary. We prefer what we know. But we can only change for the better when we resist resorting to regularity.

As with any cognitive error, the first step to avoiding the status quo bias is increasing awareness. Part of this involves simply taking the time to weigh all of your options carefully and giving them each equal consideration. Doing so will prevent you from automatically opting for the default option.

Sometimes we engage in status quo bias because choosing the norm is easier. Deliberately deciding on an alternative may require us to go slightly out of our way, even if it’s something as simple as signing the form to opt out of an insurance plan. In cases like these where the outcomes of our decisions really matter, it’s a good idea to make a plan. Write it on the calendar, schedule it into your planner, set a reminder on your phone, whatever works for you. When we’re motivated to do something, having action steps already drafted increases the chances of us actually getting around to it.⁹

William Samuelson and Richard Zeckhauser first addressed the status quo bias in their meta-analysis “Status Quo Bias in Decision Making” published in 1988.³ In particular, they investigated how “status quo framing”—that is, making one option the default choice—affected decision-making.

One study investigated status quo framing by administering a multiple-choice questionnaire placing participants in hypothetical scenarios where they had to choose between different solutions.

For one group of participants, the questions framed one option as the default and the rest of the options as deviating from the default. For the other group of participants, the same questions were worded neutrally so that no option seemed like the default. Samuelson and Zeckhauser found that the first group tended to choose the option framed as the default—even when the second group did not choose that option any more than the others. This means that the first group was only choosing those answers because they seemed like the status quo, not because they were any better than the rest.

To understand this better, here is an example question: say you are a finance enthusiast who receives a large surprise cash inheritance from your grandfather. You must choose between several portfolios you could invest the money in, each carrying different levels of risk. For the status quo group, a significant portion of your grandfather’s portfolio is already invested in a moderate-risk company. But for the control group, no significant sum of money has been invested into any company.

We can assume that participants in the status quo group were much more likely to choose the company that the grandfather’s portfolio is already invested in. After all, why go through the hassle of withdrawing the money if you don’t have to? Meanwhile, this company was probably no more popular in the control group than the rest, since it objectively was not a better option.

In the early 1980s, Coca-Cola was in trouble. After years of soda supremacy, what was once America’s favorite soft drink was rapidly losing its market share. The aging baby boomers were turning to brand new diet beverages to help them stay healthy, and the younger generation was gravitating towards Pepsi’s sweeter, smoother taste. To save the company, Coca-Cola executives needed to start thinking future-forward, and fast. The first step was to fix their flavor.

After formulating their new recipe, Coca-Cola conducted several blind taste tests that were an overwhelming success. The company dubbed their new Coke nothing other than “New Coke.” Most people preferred New Coke’s sweeter taste to the classic concoction by a wide margin. In fact, New Coke was so good that a bottling company threatened to sue Coca-Cola if they didn’t put out the drink.⁷ Proud of their creation, Coca-Cola remodeled the bottle, paid for an expensive advertising campaign, and slapped the label “New!” on the top corner of every bottle. 

Despite all of the metrics, industry experts, and executives singing its praises, the release of New Coke was a colossal failure. Shortly after hitting the market, the company’s hotline received over 40,000 outraged calls, around a thousand more each day than before.⁸ Protests, boycotts, and critics ranging from David Letterman to Fidel Castro all lambasted the change. Why did the public hate New Coke so much?

The status quo bias, of course! By all metrics, New Coke was objectively better. But remember: the marketing department taste tests were blind, meaning consumers had no idea which Coke they were drinking. However, once released into the real world with the branding “New” on every bottle, Coke drinkers opted towards the default Coke Classic instead.³ To this day, people refer to terrible ideas as the “worst thing since New Coke,” highlighting the extent to which this example of the status quo bias impacted our culture.

Ideally, retirement plans are smooth and safe investment vehicles. As you age, you slowly move from higher-risk assets to lower-risk assets, leaving you with a substantial nest egg that takes advantage of the upside of stocks and the safety of bonds. Unfortunately, most retirement plans require us to shift these assets over ourselves. In 1988, Samuelson and Zeckhauser discovered that over half of all TIAA-CREF plan participants were holding too many risky stocks in their portfolios right before retirement. This was because plan participants stuck with the default asset allocation they were given when they were young.³ Obviously, this level of risk isn’t ideal, as a turn in the stock market could wipe out your hard-earned retirement savings in an instant. 

Luckily, many mutual funds have caught on to the negative effects of the status quo bias. They now offer life-cycle funds, which automatically shift assets around based on the individual’s savings goal time horizon. This way, investors are rewarded by doing nothing, as the default option automatically shifts funds towards the optimal assets for their age group.⁹

What it is

The status quo bias refers to our preference to leave things the way they are rather than changing them. It can be summed up by the saying: “If it ain’t broke, don’t fix it.”

Why it happens

Status quo bias stems from our tendency to avoid losses and regret at all costs. Since deviating from the norm is risky, we often stick to inaction. Additionally, if we feel overwhelmed by the number or complexity of available options, opting towards the status quo helps us avoid the stress of making a decision. 

Example 1 – The New Coke Fiasco

In 1985, Coca-Cola revamped its classic recipe to fit the sweeter taste of the time. Despite several blind taste tests indicating that consumers liked New Coke better, its release sparked public outrage and commercial failure. We can attribute this boycott to the status quo bias, since the recipe’s labeling as “New” caused consumers to default to the old branding.

Example 2 – Missing out on Retirement

An effective retirement plan shifts assets from risky stocks to safe bonds as we age to protect our hard-earned savings. Unfortunately, the status quo bias prevents us from moving these ourselves, exposing us to higher risk than necessary near retirement. Luckily, behavioral science research has spawned the creation of lifecycle funds, which automatically shift assets optimally without the input of the participant.

How to avoid it

The first step to beating the status quo bias is to recognize it when it happens. When you need to move beyond the default to meet your goals, making a plan of action can help us achieve success more effectively.

Why is Changing Behavior So hard? 

In this article, Yasmine Kalkstein offers several anecdotes where we forfeit change even when it would benefit us, such as forgetting to cancel a streaming service subscription. Kalkstein goes on to explore the empirical evidence behind how framing questions as keeping things the same ultimately leads more people to stay on board. She concludes that increasing accessibility to behavioral research would help people learn how to make better decisions.

Increasing The Pull Of The Future Self 

In this article, Sarah Molouki discusses intertemporal tradeoffs, where people tend to place more value on their present satisfaction than their later well-being. Molouki hypothesizes this imbalance may stem from our tendency to view our “future self” in the third person, discouraging us from seriously considering the consequences of our actions. Finally, she concludes with some helpful interventions to make our decisions prioritize long-term goals, rather than temporary needs.