We introduce and axiomatically characterize a model of status quo bias in which the status quo affects choices by both imposing psychological constraints and focusing attention. The resulting Limited Attention Status Quo Bias model can explain both the findings that status quo bias is more prevalent in larger choice sets and that the introduction of a status quo can change choices between non-status quo alternatives. Existing models of status quo bias are inconsistent with the former finding while models of decision avoidance are inconsistent with the latter.
Limited attention and status quo biasMark Dean, Özgür Kıbrıs, Yusufcan Masatlioglu , ( 169 )
Journal of Economic Theory