What Is Inertia In Behavioral Economics?

In behavioral economics, the term inertia refers to the tendency of individuals to maintain their current course of action, even when faced with new information or changes in their environment. This behavior can be seen as a form of resistance to change, as individuals may be reluctant to alter their habits or routines, even if doing so would be in their best interest. Inertia can have a number of causes, including a lack of motivation, a lack of knowledge, or a lack of confidence in one’s ability to make good decisions. It can also be influenced by psychological factors, such as a fear of loss or a desire to maintain the status quo. Inertia can lead to suboptimal decision-making and can prevent individuals from adapting to changing circumstances.

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