Abstract
Decision makers often stick to a status quo without explicitly reconsidering it. Yet, their observed choices might be compatible with a fully rational model. We ask when such a rationalization is possible. We assume as observable only the choice of sticking to the status quo vs. changing it, as a function of a database of cases. We state conditions on the set of databases that would make the decision maker change the status quo, which are equivalent to the following representation: the decision maker entertains a set of theories, of which one is that her current choice is the best; she is inert as long as that theory beats any alternative theory according to a maximum likelihood criterion.
| Original language | English |
|---|---|
| Pages (from-to) | 289-308 |
| Number of pages | 20 |
| Journal | Journal of Economic Theory |
| Volume | 181 |
| DOIs | |
| State | Published - May 2019 |
Keywords
- Case-based decisions
- Inertia
- Status quo
- System 1
- System 2
All Science Journal Classification (ASJC) codes
- Economics and Econometrics
Fingerprint
Dive into the research topics of 'Rational status quo'. Together they form a unique fingerprint.Cite this
- APA
- Author
- BIBTEX
- Harvard
- Standard
- RIS
- Vancouver