Random Utility Models with Status Quo Bias

Status quo bias is one of the most commonly observed and attested behavioral biases in economics studies. I incorporate status quo bias into the Random Utility Model (RUM) and three of its special cases, including the Luce model, the Dual Random Utility Model (dRUM) and the Single-Crossing Random Utility Model (SCRUM). These behavioral random utility models generalize their non-behavioral counterparts, in which decision-makers (DM) randomize over alternatives that maximize a set of utility functions. Instead, in the behavioral models, DMs are only drawn to alternatives that are better than the status quo alternative and randomize his choice over utility maximizers among such alternatives. An axiomatic approach is proposed to identify DMs who choose stochastically according to these random utility models but are subject to status quo bias. I also discuss the relationship between these models with other well-known behavioral RUMs in the literature