A quantal response equilibrium with status-quo bias shows that deleting a default action forces transition to the superior equilibrium in binary coordination games regardless of switching costs or rationality, unlike taxation which requires exceeding a rationality-independent threshold.
Features of experimentally observed bounded rationality.European Economic Review, 42(3–5):413–436
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In a coordination game with switching costs and logit quantal response, endogenous hard transformations (action deletion) eliminate inertia better than soft ones (taxes), while meta-level antagonistic social preferences can block individually Pareto-improving reforms.
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Strategic Inertia and Institutional Change:A Behavioral Model of Price Reforms versus Action Deletion
A quantal response equilibrium with status-quo bias shows that deleting a default action forces transition to the superior equilibrium in binary coordination games regardless of switching costs or rationality, unlike taxation which requires exceeding a rationality-independent threshold.
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Why Efficient Reforms Fail: Endogenous Game Transformation under Status Quo Bias and Social Preferences
In a coordination game with switching costs and logit quantal response, endogenous hard transformations (action deletion) eliminate inertia better than soft ones (taxes), while meta-level antagonistic social preferences can block individually Pareto-improving reforms.