Costly switching from a status quo

Name: Costly switching from a status quo
Author: Güney, Begüm, Richter, M.

İsim	Costly switching from a status quo
Yazar	Güney, Begüm, Richter, M.
Basım Tarihi:	2018-12
Basım Yeri	- Elsevier
Konu	Choice, Switching cost, Status quo bias, Reference effect, Prisoner’s dilemma, Cooperation
Tür	Süreli Yayın
Dil	İngilizce
Dijital	Evet
Yazma	Hayır
Kütüphane:	Özyeğin Üniversitesi
Demirbaş Numarası	0167-2681
Kayıt Numarası	9800c869-499b-4e84-9a96-c0403d9572e4
Lokasyon	Economics
Tarih	2018-12
Notlar	TÜBİTAK
Örnek Metin	We axiomatically characterize a theory of status quo-dependent choice where an agent faces switching costs that depend upon both the status quo and the alternative he switches to. In a choice problem with a status quo, the agent chooses the alternatives that yield the highest utility net of switching cost. This generates status quo bias and also allows for a wide range of reference effects. We examine the behavior of such agents in Prisoner’s Dilemma (PD) games. In a single PD game, switching costs can lead to cooperation. However, across different PD games, it is not “anything goes” and instead we derive necessary and sufficient conditions for cooperation rates to be consistent with our model. We then verify that these conditions are satisfied by Charness et al.’s (2016) experimental data. We also perform a similar analysis for other theories such as models of status quo bias, magical thinking, inequity aversion, and fairness; and find that these theories make either invalidated or looser predictions.
DOI	10.1016/j.jebo.2018.08.017
Cilt	156

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Costly switching from a status quo

Yazar Güney, Begüm, Richter, M.

Basım Tarihi 2018-12

Basım Yeri - Elsevier

Konu Choice, Switching cost, Status quo bias, Reference effect, Prisoner’s dilemma, Cooperation

Tür Süreli Yayın

Dil İngilizce

Dijital Evet

Yazma Hayır

Kütüphane Özyeğin Üniversitesi

Demirbaş Numarası 0167-2681

Kayıt Numarası 9800c869-499b-4e84-9a96-c0403d9572e4

Lokasyon Economics

Tarih 2018-12

Notlar TÜBİTAK

Örnek Metin We axiomatically characterize a theory of status quo-dependent choice where an agent faces switching costs that depend upon both the status quo and the alternative he switches to. In a choice problem with a status quo, the agent chooses the alternatives that yield the highest utility net of switching cost. This generates status quo bias and also allows for a wide range of reference effects. We examine the behavior of such agents in Prisoner’s Dilemma (PD) games. In a single PD game, switching costs can lead to cooperation. However, across different PD games, it is not “anything goes” and instead we derive necessary and sufficient conditions for cooperation rates to be consistent with our model. We then verify that these conditions are satisfied by Charness et al.’s (2016) experimental data. We also perform a similar analysis for other theories such as models of status quo bias, magical thinking, inequity aversion, and fairness; and find that these theories make either invalidated or looser predictions.

DOI 10.1016/j.jebo.2018.08.017

Cilt 156