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Status quo bias has been attributed to a combination of loss aversion and the endowment effect, two ideas relevant to prospect theory.An individual weighs the potential losses of switching from the status quo more heavily than the potential gains; this is due to the prospect theory value function being steeper in the loss domain. [1]
One of the most famous examples of the endowment effect in the literature is from a study by Daniel Kahneman, Jack Knetsch & Richard Thaler, [4] in which Cornell University undergraduates were given a mug and then offered the chance to sell it or trade it for an equally valued alternative (pens).
Inertia is the natural tendency of objects in motion to stay in motion and objects at rest to stay at rest, unless a force causes the velocity to change. It is one of the fundamental principles in classical physics, and described by Isaac Newton in his first law of motion (also known as The Principle of Inertia). [1]
An example of social inertia in the culture of the United States is the culture of honor which exists in parts of the South and West. In the culture of honor, violence is seen as an acceptable way of responding to insults or threats to a person's self, family, property, or reputation.
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Against the weaker-than-expected jobs report came a one-two punch of new economic data for October, a week after a U.S. presidential election in which the economy factored largely into voter concerns.
Psychological inertia is the tendency to maintain the status quo (or default option) unless compelled by a psychological motive to intervene or reject this. [1]Psychological inertia is similar to the status-quo bias but there is an important distinction in that psychological inertia involves inhibiting any action, whereas the status-quo bias involves avoiding any change which would be ...
Here are the five biggest questions facing the Dodgers as they look to build a roster capable of repeating: 1. What are the potential ramifications of Mookie Betts moving back to the infield?