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The reversal test is a heuristic designed to spot and eliminate status quo bias, an emotional bias irrationally favouring the current state of affairs.The test is applicable to the evaluation of any decision involving a potential deviation from the status quo along some continuous dimension.
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]
Status quo bias: Tendency to hold to the current situation rather than an alternative situation, to avoid risk and loss (loss aversion). [31] In status quo bias, a decision-maker has the increased propensity to choose an option because it is the default option or status quo.
Status quo bias, the tendency to prefer things to stay relatively the same. [75] [76] System justification, the tendency to defend and bolster the status quo. Existing social, economic, and political arrangements tend to be preferred, and alternatives disparaged, sometimes even at the expense of individual and collective self-interest.
Status quo is a Latin phrase meaning the existing state of affairs, particularly with regard to social, economic, legal, environmental, political, religious, scientific or military issues. [1] In the sociological sense, the status quo refers to the current state of social structure or values. [ 2 ]
Attribute substitution is a psychological process thought to underlie a number of cognitive biases and perceptual illusions.It occurs when an individual has to make a judgment (of a target attribute) that is computationally complex, and instead substitutes a more easily calculated heuristic attribute. [1]
Using an adversarial collaboration approach, three special issues of the open access journal Judgment and Decision Making have been devoted to unravel the support for and problems with the recognition heuristic, providing the most recent and comprehensive synopsis of the epistemic status quo. In their Editorial to Issue III, the three guest ...
Cumulative prospect theory has been applied to a diverse range of situations which appear inconsistent with standard economic rationality, in particular the equity premium puzzle, the asset allocation puzzle, the status quo bias, various gambling and betting puzzles, intertemporal consumption and the endowment effect.