In 1988, William Samuelson (Boston University) and Richard Zeckhauser (Harvard University) published a seminal paper called, Status Quo Bias in Decision Making.
In one of the experiments cited in the paper, two groups of people are given a hypothetical task that involves picking from a selection of different investment opportunities.
In both cases, the groups are told that they are someone who regularly reads the “financial pages”, but that up until recently hasn’t had much money to invest.
Both groups are then told that they have just inherited “a large sum of money” from their great-uncle. This is now where the groups diverge in terms of the information given.
The first group is given a neutral version. They are told they can invest in any of the following portfolios: a moderate-risk company, a high-risk company, treasury bills, or municipal bonds.
The second group is given the same selection of portfolios, but is also given a “status quo selection.” They are told that a significant portion of their great-uncle’s portfolio is currently invested in a moderate risk company.
(They are also told that the fees associated with an investment change are insignificant and should not be a consideration for this decision.)
What do you think happened?
A number of different scenarios were tested, but as soon as one of the options was presented as the status quo, it became “significantly more popular”.
This status quo advantage also tended to increase as the number of investment options increased. Perhaps people just got overwhelmed by the options and went with the “safe bet”.
This phenomenon has become known as the status quo bias.
It is one of the reasons why some political offices have term limits. The incumbent bias can make for an uneven playing field. People vote for the name they recognize on the ballot.
And it is one of the reasons why change, in general, can be so unsettling. The countless studies suggest we have an inherent bias towards the status quo irrespective of its objective merits.
P.S. This is what came to mind as soon as I heard people calling the King Street Transit Pilot a “disaster” before the first weekday of its run was even over.
A few days ago, Seth Godin published a terrific blog post called the rationality paradox. It’s not very long (like most of his posts) and I like it a lot (particularly the bold part), and so I’m reblogging it in full here:
If you see yourself as an engineer, a scientist, or even a person of logic, then it’s entirely possible that you work to make rational decisions, decisions that lead to the outcomes you seek.
The paradox is that you might also believe that you do this all the time, and that others do it too.
But a rational analysis shows that this is far from true. Almost every choice we make is subconscious. We’re glitch-ridden, superstitious creatures of habit. We are swayed by social forces that are almost always greater than our attraction to symbolic logic would indicate. We prioritize the urgent and most of the decisions we make don’t even feel like decisions. They’re mostly habits combined with a deep desire to go along with the people we identify with.
Every time you assume that others will be swayed by your logical argument, you’ve most likely made a significant, irrational mistake.
Your actions and your symbols and your tribe dwarf the words you use to make your argument.
Consistency is what builds brands.
Whether you’re a city, company, or a person, doing the same thing over and over again is what reinforces your identity. That’s why Steve Jobs always wore a black mock turtleneck, why Mark Zuckerberg always wears a gray t-shirt and hoodie, and why Tom Ford always wears a white shirt and a black jacket. They are continually building their own distinctive brand.
I’ve always found this concept really appealing.
Maybe it’s because I had to wear a uniform every day of my life until I went to University, or maybe I just like the concept of personal branding. Either way, there are a bunch of things that I have stuck with for a long time. For example, I’ve worn the same cologne since I was 19. I bought it in Italy one summer and I really liked it. And it now always reminds me of Europe. So I keep wearing it.
But the other reason why consistency can be good for you is that it reduces the number of decisions that you need to make on a regular basis. That’s why President Obama also wears more or less the same thing every day:
You also need to remove from your life the day-to-day problems that absorb most people for meaningful parts of their day. “You’ll see I wear only gray or blue suits,” [Obama] said. “I’m trying to pare down decisions. I don’t want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make.” He mentioned research that shows the simple act of making decisions degrades one’s ability to make further decisions.
The research he’s talking about comes from people like Kathleen Vohs, professor at the University of Minnesota, and Barry Schwartz, professor at Swarthmore College, who concluded that the more decisions we make – even pleasant and enjoyable ones – the quicker we get to what’s called “decision fatigue." We simply exhaust our ability to make effective decisions.
This, to me, is a really important lesson. Because the way I look at it, we live in a world of constant noise. Our phones are always chirping. There are 132 different types of toothpaste at the store. And everywhere we turn, somebody is trying to sell us something. So maintaining a certain level of simplicity and minimalism in your life can actually be an incredibly difficult task.
More and more I’m finding this to be the case. So maybe it’s time I start wearing the same thing every day. Do you have any tips for living life, simply?