Cognitive biases
Status quo bias: why we leave everything as it is
Nora bought a new phone. The setup screen had several switches, and without reading them she kept tapping “Next.” A year later, going through her bank statement, Nora noticed that every month money was being taken for photo cloud storage she doesn’t use and for screen insurance she had forgotten about. And a store sends her offers every day. Nora chose none of this. Or rather, she did choose: by changing nothing.
This is status quo bias: we keep an option that is already in place, or already chosen for us, more often than we would pick it from a clean slate. “Changing nothing” does not feel like a decision. But it is a decision too, and it has consequences.
Below, we look at what research has shown, why a “default” setting has such a strong effect on choice, where this shows up in life, and how to check your own “just leave it.” In the middle of the article you will set up a new phone yourself.
Contents
In short: how status quo bias works
What status quo bias is
The name was coined by the American economists William Samuelson and Richard Zeckhauser in a 1988 paper. They noticed a simple thing. In textbooks, a person chooses among several options. In life there is almost always one more: do nothing, or leave things as they were. And that option has a special advantage.
They tested this in a series of experiments. In one of them, participants were asked to imagine that they had received an inheritance and were deciding where to invest the money. There were several options. Some participants were simply given a list of options. Others were told that most of the money was already in one of them, and that moving it would cost almost nothing. The option labeled “already chosen” became noticeably more popular. And it did not matter which option happened to be in that spot.
Then the authors looked at real decisions: how university faculty chose health insurance and a retirement plan. The tendency to keep the earlier choice was noticeable there too, in important decisions, not only in problems on paper.
The effect is very easy to see where an option is chosen in advance, “by default.” In some countries a person is considered to agree to become an organ donor after death unless they have opted out. In others, on the contrary, you have to sign up yourself. Eric Johnson and Daniel Goldstein, in a 2003 paper, compared such countries and ran an experiment. In both the country data and the experiment, the share of people who agreed depended strongly on which answer was pre-selected.
Another well-known example is saving for retirement through work in the US. Brigitte Madrian and Dennis Shea, in a 2001 study, described a company that started enrolling new employees in its retirement plan automatically. People could opt out at any time, but noticeably more of them took part. Many kept exactly what was offered: both the contribution amount and the way the money was invested.
How strong the effect is. A meta-analysis collected 58 studies. On average, the default option noticeably shifted choices, but not equally everywhere: in most studies it did, in a few it did not, and in two it even worked in the opposite direction. The effect was stronger in shopping and consumer decisions and weaker in decisions related to the environment. And when four problems from the 1988 paper were repeated, three held up, including the investment problem, and one did not. The takeaway: the effect is real, but not all-powerful.
Try it yourself: the new phone
The experiment takes a couple of minutes. Here is what will happen.
Step 1. You have a new phone, and one last setup screen is left: six switches. Three of them are already on. Which ones is different for each player: the computer picks. You either leave everything as it is or flip switches, as you would on your own phone. A counter shows what it will cost per year.
Step 2. We show how the same screen would have looked for a player who got different pre-set switches. And we count what you left as it was and what you changed.
Why are the switches random? If everyone had the same ones on, we could not tell why you kept, say, the cloud storage: because you need it or because it was already on. When the switches are assigned at random, we can compare two things. How often you keep what is already on. And how often you turn on what is off. If the first is noticeably more common, the pre-set switch was influencing your choice.
What usually happens. In studies, the option that is already chosen gets noticeably more votes, whichever option happens to be in that place. So people who were randomly given different pre-set switches end up living with different settings.
What your result can and cannot show. Six switches are too few to draw conclusions about a person. Maybe you really don’t need what happened to be off. So your result is a hint, not a test. In studies the effect shows up when you compare large groups of people who were given different options.
When it is not a mistake. Leaving things as they are is often reasonable. If you have already sorted it out and it suits you, a new choice will only take time. A switch can be costly or risky. The mistake begins where the only reason sounds like “it was already like that.”
Why it is so hard to change
Picture an escalator. To keep going, you don’t have to do anything. To get off on another floor, you have to take a step. This is an image, but it captures the main thing: the “default” option is the direction you are carried in while you stand still.
Researchers name several reasons. Most likely they work together.
Changing takes effort. You have to read, compare, decide, and press. Leaving it costs nothing. The researchers explained the fact that employees stuck with the suggested contribution partly by plain inertia.
A ready-made option looks like advice. It seems: if it was set up this way, it must be right. This was also part of the researchers’ explanation. And the meta-analysis showed that a default works more strongly when it is seen as a recommendation: as if whoever set the box knew what was best.
What we already have feels like ours. Giving up what we have is usually more unpleasant than not getting something new. Economists linked status quo bias precisely to this imbalance: in decisions a loss weighs more than a gain of the same size. And according to the meta-analysis, a default works more strongly when it is seen as something you already have.
Doing nothing brings less self-blame. People feel a bad outcome more strongly if it came from their action than from inaction. Researchers believe that status quo bias is, at least in part, a tendency to do nothing.
Where it gets in the way
Money and shopping. Subscriptions that renew themselves. A phone plan chosen five years ago. A bank, an insurance policy, an automatic payment that was set up once and forgotten. It seems you are deciding nothing. In fact, every month you quietly choose the old option. That is why sellers often pre-select the box that suits them.
Work and business. “We’ve always done it this way.” A weekly meeting that nobody has needed for a long time but that repeats in the calendar by itself. Canceling the familiar takes effort and responsibility; continuing does not.
Health. People often keep a health insurance plan unchanged once they have chosen it. And consent to organ donation, as we saw, depends strongly on which answer is pre-selected.
The effect can work in your favor. The same force that keeps an unneeded subscription can keep a useful habit. Automatic enrollment in a retirement plan increased the number of participants. If you make the useful option your own “default,” inertia starts working for you.
How to choose instead of just leaving it
Status quo bias is one of the biases on the cognitive bias map, in the section on decisions. Next to it is the sunk cost fallacy: it also makes it hard to let go of the old, but for a different reason.
Frequently asked questions
How is this different from the sunk cost fallacy?
With the sunk cost fallacy, what holds us is what we have already spent: “but the money is paid.” Status quo bias works without any investment. The box could have been checked for you, you spent nothing on it, and it is still hard to uncheck, simply because it is already checked.
So is changing always better?
No. Changes cost time and effort, sometimes money, and the new option can turn out worse. If you have honestly compared and the old option is better, keeping it is the right decision. The mistake is not in keeping but in keeping without choosing.
What is the default effect?
It is a closely related idea: the influence of an option that was chosen in advance, such as a box that is already ticked. The organ donation and retirement plan examples above are about it.
