Skip to main content
SpringerLink
Log in

The Roots of Cognitive Inertia: An Introduction to Institutional Changes

  • Chapter
  • First Online:
Institutional Inertia

Part of the book series: Contributions to Economics ((CE))

  • 109 Accesses

Abstract

In this chapter, we analyze the concept of cognitive inertia, investigate the roots of its formation, and then examine the role of cognitive inertia in creating institutional changes. Cognitive inertia means the tendency to perpetuate beliefs after they are formed. The findings of this chapter show that cognitive biases play an effective role in the emergence of cognitive inertia. Among the most important identified biases that have a greater impact on the formation and escalation of cognitive inertia, this chapter identifies the following: status-quo bias, confirmation bias, commitment escalation bias, belief bias, conservatism bias, and self-attribution bias.

Also, the results of this chapter show that one of the most important reasons for not forming institutional changes in a society can be attributed to the problem of cognitive inertia. Institutional economist, Douglas North argues that there is a close relationship between mental models, belief systems, and institutions. He believes that institutions are derived from belief systems. He also believes that the difference between rich and poor countries comes from the difference in their beliefs. Therefore, the lack of change in the belief system can lead to the lack of institutional changes.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 139.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 179.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Similar content being viewed by others

Notes

  1. 1.

    To read more about the concept of inertia, refer to Chapter “Inertia: Resistance and Endurance” of this book.

  2. 2.

    To read more about the concept of institutional inertia, and its causes refer to Chapter “An Introduction to Institutional Inertia: Concepts, Types and Causes” of this book.

  3. 3.

    The effect of cognitive inertia on institutional inertia is explained in Part III of Chapter “Overview of Institutional–Organizational Inertia Nexus” of this book.

References

  • Allcorn, S., & Diamond, M. (1997). Managing people during stressful time: The psychologically defensive workplace. Quorum Books.

    Google Scholar 

  • Ariely, D. (2008). Predictably irrational. Harper Collins.

    Google Scholar 

  • Arkes, H. R. (1996). The psychology of waste. Journal of Behavioral Decision Making, 9, 213–224.

    Article  Google Scholar 

  • Bell, D. E. (1982). Regret in decision making under uncertainty. Operations Research, 30(5), 961–981.

    Article  Google Scholar 

  • Bessi, A. (2016). Personality traits and echo chambers on Facebook. Computers in Human Behavior, 65, 319–324.

    Article  Google Scholar 

  • Blasingame, J. (2011, October 3). Beware of the Concorde fallacy. Forbes. https://www.forbes.com/sites/jimblasingame/2011/09/15/beware-of-theconcorde-fallacy/#5655b8334e22

  • Bobocel, D. R., & Meyer, J. P. (1994). Escalating commitment to a failing course of action: Separating the roles of choice and justification. Journal of Applied Psychology, 79(3), 360–363.

    Article  Google Scholar 

  • Bourdieu, P. (1985). The social space and the genesis of groups. Theory and Society, 14, 723–744. https://doi.org/10.1007/BF00174048

    Article  Google Scholar 

  • Brockner, J. (1992). The escalation of commitment to a failing course of action: Toward theoretical progress. Academy of Management Review, 17, 39–61.

    Article  Google Scholar 

  • Brown, A. L., Imai, T., Vieider, F., & Camerer, C. (2021). Meta-analysis of empirical estimates of loss-aversion. Available at SSRN 3772089.

    Google Scholar 

  • Campbell, W. K., Sedikides, C., Reeder, G. D., & Elliot, A. J. (2000). Among friends? An examination of friendship and the self-serving bias. British Journal of Social Psychology, 39(2), 229–239.

    Article  Google Scholar 

  • Chapman, S., Wong, W. L., & Smith, W. (1993). Self-exempting beliefs about smoking and health: Differences between smokers and ex-smokers. American Journal of Public Health, 83(2), 215–219.

    Article  Google Scholar 

  • Cialdini, R. B. (2008). Influence: Science and practice (5th ed.). Pearson Educations, Inc.

    Google Scholar 

  • De Michele, P. E., Gansneder, B., & Solomon, G. B. (1998). Success and failure attributions of wrestlers: Further evidence of the self-serving bias. Journal of Sport Behavior, 21(3), 242.

    Google Scholar 

  • Dean, M., Kibris, O., & Masatlioglu, Y. (2017). Limited attention and status quo bias. Journal of Economic Theory, 169, 93–127.

    Article  Google Scholar 

  • Dierkes, M. (Ed.). (2003). Handbook of organizational learning and knowledge. Oxford University Press, USA.

    Google Scholar 

  • Elstad, E., Carpenter, D. M., Devellis, R. F., & Blalock, S. J. (2012). Patient decision making in the face of conflicting medication information. International Journal of Qualitative Studies on Health and Well-Being, 7(1), 18523–18511.

    Article  Google Scholar 

  • Festinger, L. (1957). A theory of cognitive dissonance. Stanford University Press.

    Book  Google Scholar 

  • Fukuyama, F. (2011). The origins of political order: From pre human times to the French Revolution. Farrar, Straus, Giroux.

    Google Scholar 

  • Gal, D. (2006). A psychological law of inertia and the illusion of loss aversion. Judgment and Decision Making, 1, 23–32.

    Article  Google Scholar 

  • Gelberg, G. B. (2002). Regret theory-explanation, evaluation and implications for the law. University of Michigan Journal of Law Reform, 36, 183.

    Google Scholar 

  • Geschke, D., Lorenz, J., & Holtz, P. (2019). The triple-filter bubble: Using agent-based modelling to test a meta-theoretical framework for the emergence of filter bubbles and echo chambers. British Journal of Social Psychology, 58(1), 129–149.

    Article  Google Scholar 

  • Greenberg, J., Pyszczynski, T., Burling, J., & Tibbs, K. (1992). Depression, self-focused attention, and the self-serving attributional bias. Personality and Individual Differences, 13(9), 959–965.

    Article  Google Scholar 

  • Gupta, M., Parra, C. M., & Dennehy, D. (2021). Questioning racial and gender bias in AI-based recommendations: Do espoused national cultural values matter? Information Systems Frontiers, 1-17, 1465–1481. https://doi.org/10.1007/s10796-021-10156-2

    Article  Google Scholar 

  • Hedberg, B., & Wolff, R. (2003). Organizing, learning, and strategizing: From construction to discovery. In M. Dierkes, A. B. Antal, J. Child, & I. Nonaka (Eds.), Handbook of organizational Learning & Knowledge (pp. 535–556). Oxford University Press.

    Google Scholar 

  • Heider, F. (1958). The psychology of interpersonal relations. Taylor and Francis.

    Book  Google Scholar 

  • Hodgson, G. M. (2004). The evolution of institutional economics. Routledge.

    Book  Google Scholar 

  • Hooghiemstra, R. (2008). East—West differences in attributions for company performance: A content analysis of Japanese and US corporate annual reports. Journal of Cross-Cultural Psychology, 39(5), 618–629.

    Article  Google Scholar 

  • Itzchakov, G., & Van Harreveld, F. (2018). Feeling torn and fearing rue: Attitude ambivalence and anticipated regret as antecedents of biased information seeking. Journal of Experimental Social Psychology, 75, 19–26.

    Article  Google Scholar 

  • Jung, D. (2019, March 19). Nudge action: Overcoming decision inertia in financial planning tools. Behavioraleconomics.com. Retrieved from https://www.behavioraleconomics.com/nudge-action-overcoming-decision-inertia-in-financial-planning-tools/

  • Kahneman, D. (2011). Thinking, fast and slow. Farrar, Straus and Giroux.

    Google Scholar 

  • Kahneman, D., & Tversky, A. (1977). Prospect theory. An analysis of decision making under risk. https://doi.org/10.21236/ada045771

  • Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291.

    Article  Google Scholar 

  • Kahneman, D., & Tversky, A. (1982). The psychology of preference. Scientific American, 246, 160–173.

    Article  Google Scholar 

  • Kahneman, D., Slovic, S. P., Slovic, P., & Tversky, A. (Eds.). (1982). Judgment under uncertainty: Heuristics and biases. Cambridge University Press.

    Google Scholar 

  • Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1991). Anomalies: The endowment effect, loss aversion, and status quo bias. Journal of Economic Perspectives., 5(1), 193–206. https://doi.org/10.1257/jep.5.1.193

    Article  Google Scholar 

  • Knobloch-Westerwick, S., & Kleinman, S. B. (2012). Pre-election selective exposure: Confirmation bias versus informational utility. Communication Research, 39(2), 170–193.

    Article  Google Scholar 

  • Larrick, R. P., & Boles, T. L. (1995). Avoiding regret in decisions with feedback: A negotiation example. Organizational Behavior and Human Decision Processes, 63(1), 87–97.

    Article  Google Scholar 

  • Loomes, G., & Sugden, R. (1982). Regret theory: An alternative theory of rational choice under uncertainty. The Economic Journal, 92(368), 805.

    Article  Google Scholar 

  • Madrian, B., & Shea, D. (2001). The power of suggestion: Inertia in 401(k) participation and savings behavior. Quarterly Journal of Economics, 116, 1149–1187.

    Article  Google Scholar 

  • Mankiw, N. G. (2018). Principles of economics (8th ed.). McGraw-Hill Education.

    Google Scholar 

  • Mantzavinos, C., North, D. C., & Shariq, S. (2004). Learning, institutions, and economic performance. Perspectives on Politics, 2(1), 75–84.

    Google Scholar 

  • Mcguire, W. J. (1960). Cognitive consistency and attitude change. Journal of Abnormal and Social Psychology, 60(3), 345–353.

    Article  Google Scholar 

  • Mclaughlan, B., & Bossarte, S. (2012, July). Computationally adjustable cognitive inertia. Department of Computer and Information Science University of Arkansas, USA.

    Google Scholar 

  • Messner, C., & Vosgerau, J. (2010). Cognitive inertia and the implicit association test. Journal of Marketing Research, 47, 2–386.

    Article  Google Scholar 

  • Mezulis, A. H., Abramson, L. Y., Hyde, J. S., & Hankin, B. L. (2004). Is there a universal positivity bias in attributions? A meta-analytic review of individual, developmental, and cultural differences in the self-serving attributional bias. Psychological Bulletin, 130(5), 711–747.

    Article  Google Scholar 

  • Moon, Y. (2003). Don’t blame the computer: When self-disclosure moderates the self-serving bias. Journal of Consumer Psychology, 13(1–2), 125–137.

    Google Scholar 

  • Nan tzavinos, C., North, D., & Sharig, S. (2004). Learning, institutions and economic performance. Perspectives on Politics, 2(1), 76–79.

    Google Scholar 

  • Nebel, J. M. (2015). Status quo bias, rationality, and conservatism about value. Ethics, 125(2), 449–476.

    Article  Google Scholar 

  • Nickerson, R. S. (1998). Confirmation bias: A ubiquitous phenomenon in many guises. Review of General Psychology, 2, 175–220.

    Article  Google Scholar 

  • Nikolova, M. S. (2020). Behavioral economics for tourism: Perspectives on business and policy in the travel industry. Academic.

    Google Scholar 

  • North, D. C. (1994). Economic performance through time. The American Economic Review, 84(3), 359–368.

    Google Scholar 

  • North, D. C. (2005). Understanding the process of economic change. Preston University Press., 15–155.

    Google Scholar 

  • Nyhan, B., & Reifler, J. (2010). When corrections fail: The persistence of political misperceptions. Political Behavior, 32(2), 303–330.

    Article  Google Scholar 

  • Okonofua, E. C., Simpson, K. N., Jesri, A., Rehman, S. U., Durkalski, V. L., & Egan, B. M. (2006). Therapeutic inertia is an impediment to achieving the healthy people 2010 blood pressure control goals. Hypertension, 47, 345–351. https://doi.org/10.1161/01.HYP.0000200702.76436.4b

    Article  Google Scholar 

  • Pal, G. C. (2007). Is there a universal self-serving attribution bias? Psychological Studies.

    Google Scholar 

  • Phillips, L. S., Branch, W. T., Cook, C. B., Doyle, J. P., El-Kebbi, I. M., Gallina, D. L., et al. (2001). Clinical inertia. Annals of Internal Medicine, 135, 825–834. https://doi.org/10.7326/0003-4819-135-9-200111060-00012

    Article  Google Scholar 

  • Pitz, G. F., & Reinhold, H. (1968). Payoff effects in sequential decision-making. Journal of Experimental Psychology, 77, 249–257. https://doi.org/10.1037/h0025802, 183–206.

    Article  Google Scholar 

  • Ritov, I., & Baron, J. (1992). Status-quo and omission biases. Journal of Risk and Uncertainty, 5, 49–61. https://doi.org/10.1007/BF00208786

    Article  Google Scholar 

  • Samuelson, W., & Zeckhauser, R. J. (1988). Status quo bias in decision making. Journal of Risk and Uncertainty, 1, 7–59.

    Article  Google Scholar 

  • Seiler, M., Seiler, V., Traub, S., & Harrison, D. (2008). Regret aversion and false reference points in residential real estate. Journal of Real Estate Research, 30(4), 461–474.

    Article  Google Scholar 

  • Shepperd, J., Malone, W., & Sweeny, K. (2008). Exploring causes of the self-serving bias. Social and Personality Psychology Compass, 2(2), 895–908.

    Article  Google Scholar 

  • Singh, R., Singh, R. K., & Singh, S. (2020). Developing intellectual efficiency and “the life challenges”; doing good things and happiness. https://doi.org/10.6084/m9.figshare.11841249.v2

  • Staw, B. M., & Ross, J. (1987). Behavior in escalation situations: Antecedents, prototypes, and solutions. In L. L. Cummings & B. M. Staw (Eds.), Research in organizational behavior (Vol. 9). JAI Press.

    Google Scholar 

  • Sweis, B. M., Abram, S. V., Schmidt, B. J., Seeland, K. D., MacDonald, A. W., Thomas, M. J., & Redish, A. D. (2018). Sensitivity to “sunk costs” in mice, rats, and humans. Science, 361(6398), 178–181.

    Article  Google Scholar 

  • Teitelbaum, J. C., & Zeiler, K. (Eds.). (2018). Research handbook on behavioral law and economics. Edward Elgar Publishing.

    Google Scholar 

  • Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Making, 12, 183–206.

    Article  Google Scholar 

  • Toboso, F. (1995). Explaining the process of change taking place in legal rules and social norms: The cases of institutional economics and new institutional economics. European Journal of Law and Economics, 2(1), 63–84.

    Article  Google Scholar 

  • Tripsas, M., & Gavetti, G. (2000). Capabilities, cognition, and inertia: Evidence from digital imaging. Strategic Management Journal, 21, 10–11.

    Article  Google Scholar 

  • van Strien, J. L., Kammerer, Y., Brand-Gruwel, S., & Boshuizen, H. P. (2016). How attitude strength biases information processing and evaluation on the web? Computers in Human Behavior, 60, 245–252.

    Article  Google Scholar 

  • Weaver, R., & Frederick, S. (2012). A reference price theory of the endowment effect. Journal of Marketing Research, 49(5), 696–707. https://doi.org/10.1509/jmr.09.0103.S2CID412119

    Article  Google Scholar 

  • Westerwick, A., Johnson, B. K., & Knobloch-Westerwick, S. (2017). Confirmation biases in selective exposure to political online information: Source bias vs. content bias. Communication Monographs, 84(3), 343–364.

    Article  Google Scholar 

  • Wood, T., & Porter, E. (2018). The elusive backfire effect: Mass attitudes’ steadfast factual adherence. Political Behavior, 1–29. https://doi.org/10.1007/s11109-018-9443-y

  • Zeelenberg, M., & Beattie, J. (1997). Consequences of regret aversion 2: Additional evidence for effects of feedback on decision making. Organizational Behavior and Human Decision Processes, 72(1), 63–78.

    Article  Google Scholar 

  • Zhao, H., Fu, S., & Chen, X. (2020). Promoting users’ intention to share online health articles on social media: The role of confirmation bias. Information Processing & Management, 57(6), 102354. https://doi.org/10.1016/j.ipm.2020.102354

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Shiraz University, Shiraz, Iran

    Ali Hussein Samadi, Mojtaba Panahi & Alireza Raanaei

Authors
  1. Ali Hussein Samadi
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Mojtaba Panahi
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Alireza Raanaei
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Ali Hussein Samadi .

Editor information

Editors and Affiliations

  1. UNESCO Chair Professor Emeritus, Cambridge, MA, USA

    Nezameddin Faghih

  2. Department of Economics, Shiraz University, Shiraz, Iran

    Ali Hussein Samadi

Rights and permissions

Reprints and permissions

Copyright information

© 2024 The Author(s), under exclusive license to Springer Nature Switzerland AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Samadi, A.H., Panahi, M., Raanaei, A. (2024). The Roots of Cognitive Inertia: An Introduction to Institutional Changes. In: Faghih, N., Samadi, A.H. (eds) Institutional Inertia. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-031-51175-2_6

Download citation

Publish with us

Policies and ethics

Search

Navigation