Abstract: I propose a choice theory that explains the well-documented phenomenon of status quo bias (SQB) with the concept of just-noticeable differences (JNDs). SQB comes from an inclination to choose a default option/current choice when decision-making, whereas a JND is the minimal stimulus required to be able to perceive change. I show that choice behaviour that is consistent with SQB can also be represented by JND utility, with the converse not necessarily true. Masatlioglu and Ok (2005) is a seminal paper in the literature of rational choice with SQB. As such, I propose a generalised representation of SQB with the classic JND utility representation via minimal restrictions on normatively rational behaviour. Given that JNDs yield a potential explanation for SQB, I also show that it is possible to aggregate JND preferences over characteristics of goods in ways that are consistent (with or without SQB) with the overall choice of goods. Using a revealed preference approach applied to a scanner dataset, I also estimate the JND parameter (with the interpretation of a switching cost), to be higher, on average, for those who are status quo biased.
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