Status quo bias.
In plain English
Status quo bias is the tendency to prefer things staying the same, treating the current state as a baseline and any change as a risk. Samuelson and Zeckhauser demonstrated it in 1988 across a series of experiments and in real choices like health-plan and retirement selections, where people disproportionately stuck with whatever they already had. In money terms it explains why an old savings account paying nothing keeps the balance, why a starter 401(k) allocation goes untouched for years, and why people stay with a worse deal simply because switching means action.
01Why it matters
Money left in a default that no longer serves you compounds the cost over time, so status quo bias can quietly cost real returns or interest even though nothing about the choice was ever actively decided.
02The math, step by step
Someone opens a savings account paying almost nothing, and a year later higher-yield options are widely available, but the balance stays put. Nothing chose the low rate; the absence of a decision did. The bias is the missing switch, not a bad switch.
03What this is NOT
It is not the same as actively choosing to stay. Status quo bias is inertia, sticking by default rather than by decision. Choosing to keep something after weighing alternatives is a real choice; drifting because change takes effort is the bias.
04Receipts
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