Behavioral Economics Viewed through Corrective Processes of Life Stability

Abstract

Using the Life Stability Principle (LSP), this paper reinterprets representative judgment and choice phenomena such as loss aversion, status quo bias, anchoring, conformity, and the sunk-cost effect from the common perspective of corrective processes of life stability. It distinguishes the Physiological Stability Variable (P) from the Relational Stability Variable (R) and, rather than determining these states directly from observed behavior, retains P-related and R-related deviation candidates as pre-confirmation hypotheses. This makes it possible for the same overt behavior to support different hypotheses about the stability conditions involved. To clarify the scope of LSP, the paper further introduces two exploratory conceptual aids - mediation distance and attributional ambiguity - and uses them to delineate domains in which established cognitive, social, and learning theories should remain primary. It also outlines a basic process for translating analysis based on P and R into confirmation by the individual and corrective support. LSP is not proposed as a replacement for existing theories in behavioral economics or judgment and decision making; instead, the paper presents testable predictions and falsification conditions for evaluating whether adding state information concerning P and R provides incremental explanatory and predictive value beyond existing models.