Status quo bias, multiple priors and uncertainty aversion

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41 Scopus citations


Motivated by the extensive evidence about the relevance of status quo bias both in experiments and in real markets, we study this phenomenon from a decision-theoretic prospective, focusing on the case of preferences under uncertainty. We develop an axiomatic framework that takes as a primitive the preferences of an agent for each possible status quo option, and provide a characterization according to which the agent considers a full-dimensional set of possible priors and abandons her status quo option only if she finds an alternative that returns a higher expected utility for each of these priors. We then show that, in this framework, the very presence of a status quo induces the agent to be more uncertainty averse than she would be without a status quo option.

Original languageEnglish (US)
Pages (from-to)411-424
Number of pages14
JournalGames and Economic Behavior
Issue number2
StatePublished - Jul 2010
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics


  • Ambiguity aversion
  • Endowment effect
  • Status quo bias


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