Psychological inertia

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Psychological inertia is the tendency to maintain the status quo (or default option) unless compelled by a psychological motive to intervene or reject this.[1]

Psychological inertia is similar to the status-quo bias but there is an important distinction in that psychological inertia involves inhibiting any action, whereas the status-quo bias involves avoiding any change as it would be perceived as a loss.

Research into psychological inertia is limited, particularly into its causes, but it has been seen to affect decision-making by causing individuals to automatically choose or prefer the default option, even if there is a more beneficial option available to them, unless motivated to reject this option. For example, psychological inertia may cause individuals to continue with their investments later than they should, despite information telling them otherwise, causing them to suffer greater losses than they would have if they had disinvested earlier.[2]

Psychological inertia has also seen to be relevant in areas of health, crime and within the workplace.

Status quo bias

David Gal and Derek Rucker both suggest that psychological inertia could be a more suitable explanation for phenomena such as the status-quo bias and the endowment effect than loss aversion.[3]

The psychological inertia account asserts that the reason individuals choose to remain at the status quo is due to a lack of psychological motive to change this behaviour rather than through the weighing up of losses and gains in this decision. Both explanations were tested by David Gal in a study where subjects were asked to imagine that they owned a quarter minted in either Denver or Philadelphia. They were then given the choice of exchanging their coin with one minted in the other city, assuming insignificant time and effort involved in this process. It was found that 85% of participants chose to retain their original coin which can be explained by the inertia account of remaining at the status quo. However, the loss aversion account is unable to explain this decision as it does not provide insight into a propensity towards the status-quo when the option values are equivalent.[1]

Endowment effect

The endowment effect, i.e. greater value being placed on objects that are owned than those that are not, has been shown to be caused by loss aversion. This was demonstrated in Daniel Kahneman's study in 1990 where participants who were given a mug demanded, on average, around seven dollars to part with it. Whereas, individuals who were not given a mug were only willing to spend, on average, around three dollars on the same mug. This therefore demonstrated that losses exert a greater impact than gains. However, it could also be seen as evidence for psychological inertia as the participants were provided with the same objects and therefore, as they were indifferent to them, they chose to maintain the status quo as there was no incentive to trade.[3]

Inability to break with tradition

The 1998 article "Psychological Inertia" by James Kowalick[4] refers to a company where the president was displeased that company management had little knowledge of what was going on in the manufacturing department. The management team was not approachable and looked down on employees that were not managers. "Remaining behind the sacred doors of one's managerial office had become quite a tradition." To address this issue, the president asked each manager to present a manufacturing procedure in detail at the staff meeting while the other managers asked penetrating questions. As a result, in short time, managers were on the production floor learning the procedures. This form of PI represents "cultural and traditional programming".[4]

Examples and applications

See also

References

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