Investigating Irrational Inactivity: A Prototype Analysis of Financial Inertia

As inertia lacks a comprehensive definition, this thesis aids the formulation of a singular yet widely applicable definition. This is accomplished by examining the feasibility of definitions obtained through the scientific literature (a top-down approach) and laypeople (a bottom-up approach). A single definition for inertia proves to be elusive due to inertia’s many different uses, interpretations, and overlap with other constructs. For this reason, several distinguishing features were identified to differentiate inertia. In addition, a dichotomy between inertia as a behaviour and tendency was proposed to reconcile contradictions within the literature. Nevertheless, a classical definition with clear boundaries proved to be problematic. Therefore, a bottom-up approach examined through a prototype analysis whether inertia may have a prototype structure. In this case, inertia is best explained through many distinct, yet overlapping concepts instead of a few boundary conditions. In...Show moreAs inertia lacks a comprehensive definition, this thesis aids the formulation of a singular yet widely applicable definition. This is accomplished by examining the feasibility of definitions obtained through the scientific literature (a top-down approach) and laypeople (a bottom-up approach). A single definition for inertia proves to be elusive due to inertia’s many different uses, interpretations, and overlap with other constructs. For this reason, several distinguishing features were identified to differentiate inertia. In addition, a dichotomy between inertia as a behaviour and tendency was proposed to reconcile contradictions within the literature. Nevertheless, a classical definition with clear boundaries proved to be problematic. Therefore, a bottom-up approach examined through a prototype analysis whether inertia may have a prototype structure. In this case, inertia is best explained through many distinct, yet overlapping concepts instead of a few boundary conditions. In Study 1, participants freely generated features of financial decision-making. In Study 2, the resultant features were adapted to financial inertia and were tested for their representativeness. These preliminary analyses indicated that inertia might indeed have a prototype structure as numerous features were considered central to inertia. While these inferences are somewhat tentative until inertia’s prototype structure is fully confirmed in subsequent tests, there are indications that the dichotomy following from the top-down approach may mirror patterns in the most centrally rated features from the bottom-up approach.Show less

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Investigating Irrational Inactivity: A Prototype Analysis of Financial Inertia