Bryan Caplan  

The Interaction Between Status Quo Bias and Signaling

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Human beings suffer from status quo bias: When they face different default options, they make different choices.  Offering "a burger and fries for $10, with $3 off without the fries" is economically equivalent to "a burger for $7, and fries for $3."  But the two offers are not psychologically equivalent, and a restaurant will sell more fries using the first framing.

The same goes for, say, marriage.  "Divorce is tough, unless you check the 'easy divorce' box" is economically equivalent to "Divorce is easy, unless you check the 'tough divorce' box."  But it's pretty obvious that these alternate default rules will noticeably affect behavior.  If tough divorce is the default, more people will opt for tough divorce; if easy divorce is the default, more people will opt for easy divorce.

Notice, however, that there's a key disanlogy between buying lunch and getting married: when you buy lunch, you (usually) just want something to eat; you're (usually) not trying to make a good impression on other people.  When you marry, however, you're clearly trying to make a good impression on other people.  At the bare minimum, you're trying to make a good impression on your spouse-to-be.  In most cases, you're also trying to make a good impression on your spouse's family.

Now suppose that when they marry, 75% of people go with the default rule for divorce.  In "tough divorce" states, 75% opt for tough divorce; in "easy divorce" states, 75% opt for easy divorce.  What should you conclude about the degree of commitment of your spouse-to-be when he proposes easy divorce or tough divorce?  It depends on your state's default rule

Degree of Commitment Signaled by Your Spouse-to-Be

 

Default Divorce Rule

Expressed Preference of Spouse-to-Be

 

Easy

Hard

Easy

bottom 75%

bottom 25%

Hard

top 25%

top 75%


If you live in an easy divorce state, asking for easy divorce is only a moderately negative signal.  You're putting yourself in the bottom 75% of commitment.  But if you live in a hard divorce state, asking for easy divorce is a seriously negative signal.  You're putting yourself in the bottom 25% of commitment. 

The same goes when your spouse-to-be asks for hard divorce.  In an easy divorce state, this is a seriously positive signal.  He puts himself in the top 25% of commitment.  In a hard divorce state, in contrast, this is only a moderately positive signal.  Asking for hard divorce when hard divorce is the default puts you in the top 75% of commitment.

The lesson: status quo bias and signaling interact in a surprising way.  When status quo bias makes a signal more common, sending that signal says less about you, and not sending that signal says more about you.*  Making something the status quo doesn't just change our behavior; it changes what a given behavior communicates to our fellow men.

* This abstracts from people's generic desire to signal conformity, which complicates matters. 



COMMENTS (6 to date)
Salem writes:

The signaling issue is why I think allowing couples to have covenant (or, ideally, no-divorce) marriages is a brilliant reform. Give it a few generations and at-will divorce will be competed out of the marketplace.

Doug writes:

Was thinking about something similar with regards to birth control and high-impact vs low-impact child rearing.

In a culture where everyone has kids the median parenting effort is likely to be lower. At least compared to a culture where some fraction of those with low preferences for kids don't have them. The subset of the population that are parents will probably me more involved since they preferred kids more.

For parents there's signaling involved in the effort they put into parenting with the bar roughly set around the median. Pre 1950 when birth control was less available pretty much everyone had kids and fertility rates were high. The culture reflected low-impact and asked for only a modicum of effort.

Once birth control becomes available some fraction of people choose to remain childless. The majority of these people probably would have been part of the "lazy parent" below median group.

The median edges up and culturally the bar for signaling parental involvement also edges up. This increases the cost of parenting and nudges slightly more people into being child free. This raises the median more. And so on...

It's not to hard to see why the invention of birth control created a cultural feedback loop that's pushed the West into its current low fertility, high parental expectation state.

Happily Engaged writes:

Forgive me, I'm new to marriage...

What is a hard divorce vs. easy divorce? When is that decision made?

Peter writes:

@Happily Engaged:

Curious myself. My gut is telling me "easy" are no-fault divoce states where all assets are assigned a monetary value and simply divided 50/50 with everything else being hard as they are attempting to find a equalitable solution. The problem is you won't find a "easy" divorce state using that criteria :)

AC writes:

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Seth writes:

I think some people call the two together a social norm.

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