Action Bias and Environmental Decisions

Authors: Patt A.¹; Zeckhauser R.²

Source: Journal of Risk and Uncertainty, Volume 21, Number 1, July 2000 , pp. 45-72(28)

Publisher: Springer

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Abstract:

Individuals have a penchant for action, often for good reasons. But action bias arises if that penchant is carried over to areas where those reasons do not apply, hence is nonrational. Action bias is explored theoretically, and then empirically, using data from surveys of hypothetical environmental decisions. Quite apart from agency considerations, individuals like to affect outcomes when gains are reaped. Given the ability to help one of two sites, we find that decision makers choose to foster improvement rather than prevent deterioration, despite framing that makes it arbitrary which site is improved, which preserved. Strong action bias—individuals choosing to reap gains even though they must impose losses—is also observed. These concepts are related to loss aversion, status quo bias, omission bias for losses, and bright-line behavior.

Keywords: action bias; behavioral economics; loss aversion; status quo bias

Language: English

Document Type: Regular paper

Affiliations: 1: Belfer Center for Science and International Affairs, Harvard University, 79 JFK St., Cambridge, MA 02138 apatt@bu.edu 2: Harvard University richard_zeckhauswer@harvard.edu

Publication date: 2000-07-01