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Fernandez Rodrik (1991) - Resistance To Reform Status Quo Bias In The Presence Of Individual Specific Uncertainty (view source)
Revision as of 04:11, 8 March 2011
, 04:11, 8 March 2011→Summary
In these circumstances, situations may arise in which a majority of workers oppose legislation that would require them to change sectors (such as trade liberalization, the motivating example of this paper) and instead favor the status quo. However should the legislation pass anyway, the workers would find out where they stand in the distribution. Some portion of workers who changed would then realize that the new legislation is actually better for them than the old status quo and would therefore resist efforts to repeal the law and revert to the old status quo.
Other situations may arise in which a majority of workers supports a similar piece of legislation because of an attractive mean. However upon learning their personal costs, a fraction of the voters who changed industries realizes that they may have preferred the status quo.
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