Omission bias is an essential part of behavioral economics. It is a very important natural tendency that individuals have that can lead to behaviors that vary from traditional economic theory. Using a scenario for the sake of explaining this concept in a simpler fashion, imagine that you’re in a basketball game and there’s 5 seconds left and you either have the choice to pass the ball or shoot the ball.
First, consider the following option, Choice 1:
you could shoot the ball but the major cost of this choice would be that if you miss, you might feel responsible for the loss. On the other hand, you have, Choice 2:
where if you pass the ball and your teammate misses, you could feel responsible for the loss as you could have taken the shot and possibly won the game. Which choice would you feel more responsible for and which one would you be more willing to pick?
If you choose Choice 2 over Choice 1, then your choice basically represents the idea of omission bias. Omission bias is the natural tendency where individuals tend to pick the option where they do not do anything (inaction) and something negative happens over the option of doing something (action) which ends up causing something negative to happen. Choice 1 is essentially committing an action which results in something negative since you are literally taking the shot. Choice 2 is inaction or not committing an action which results in something negative since you are not taking the shot and are instead passing the ball to a teammate.
Omission bias also says that people who choose to perform an action like Choice 1 which leads to something negative happening may feel more regret than inaction since they may feel they have directly caused the negative result with their action. According to omission bias, people will feel less regret if they choose inaction or Choice 2 since they can argue that something out of their control may have caused the negative result.
Citations:
Akerlof, George A. 2020. "Sins of Omission and the Practice of Economics." Journal of Economic Literature, 58 (2): 405-18.
Yeung, S. K., Yay, T., & Feldman, G. (2022). Action and Inaction in Moral Judgments and Decisions: Meta-Analysis of Omission Bias Omission-Commission Asymmetries. Personality and Social Psychology Bulletin, 48(10), 1499-1515. https://doi.org/10.1177/01461672211042315
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