Ambiguity Seeking as a Result of the Status Quo Bias

34 Pages Posted: 15 Nov 2005

See all articles by Mercè Roca

Mercè Roca

Independent

Robin M. Hogarth

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

A. John Maule

University of Leeds - Faculty of Business

Date Written: September 1, 2005

Abstract

Several factors affect attitudes toward ambiguity. What happens, however, when people are asked to exchange an ambiguous alternative in their possession for an unambiguous one? We present three experiments in which individuals preferred to retain the former. This status quo bias emerged both within- and between-subjects, with and without incentives, with different outcome distributions, and with endowments determined by both the experimenter and the participants themselves. Findings emphasize the need to account for the frames of reference under which evaluations of probabilistic information take place as well as modifications that should be incorporated into descriptive models of decision making.

Keywords: Ambiguity, risk, status quo bias, decision making, uncertainty

JEL Classification: C91, D81

Suggested Citation

Roca, Mercè and Hogarth, Robin M. and Maule, A. John, Ambiguity Seeking as a Result of the Status Quo Bias (September 1, 2005). Available at SSRN: https://ssrn.com/abstract=847655 or http://dx.doi.org/10.2139/ssrn.847655

Robin M. Hogarth

Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
34 93 542 2561 (Phone)
34 93 542 1746 (Fax)

A. John Maule

University of Leeds - Faculty of Business ( email )

Leeds LS2 9JT
United Kingdom

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