Status quo bias

Now, let's add another psychological effect.

In nineteen eighty-eight, William Samuelson and Richard Zeckhauser published research on what became known as status quo bias.

People tend to favor the existing opinion, the familiar opinion, the default, even when other choices may be equally good or better.

Think about what that looks like in the trades.

But notice what happened.

The familiar procedure was given the benefit of the doubt simply because it was familiar.

That is status quo bias.

The old method feels safer because it is old.

It turns out that researchers have been asking versions of the, of this question and situation for decades.

For instance, in the '80s, a, a couple of economists published research in the Journal of Risk and Uncertainty examining something called status quo bias.

We're all familiar with status quo, but there's status quo bias.

Their experiments found that people often showed a preference for maintaining an existing arrangement rather than choosing an alternative, and they also examined real-world decisions involving health plans and retirement programs.

Now, this doesn't mean every familiar choice is a bad one.

Within two months they had a 20% decrease in sales, and at that time they went back to the original packaging, but they had a $50 million loss, um, alongside that.

And in this case I give the example of status quo bias, uh, knowing how...

So the talk was why change fails and how you can beat the odds, right? And so in this case, when you don't respect that status quo of what people are already locked into, whether that is a process that they are using at work, um, or, you know, their favorite breakfast juice, um, people have that bias for the status quo.

And if you take it away and say, "Oh, they shouldn't care.

"But maybe we're also gonna have a glass of juice behind it, or we're gonna do something," right? They could look at options to, um, refresh but not change everything.

And so, um, you know, and when it is something, you know, you're having to make a change internally, you're using a new system or process, you're asking people to adopt AI, whatever it is, to just say, "Oh, well, don't worry about what it has been.

It's like new, new, new, exciting, exciting," like, people aren't as excited about that [laughs] as they may say or you would like them to be because of that status quo bias.

So you wanna help understand what they value to get them on board.