Buyers choose the option that is easiest to justify if it fails rather than the one most likely to succeed.
The decision is rational for the buyer and poor for the organisation. Choosing the incumbent and failing is a misfortune; choosing the challenger and failing is a mistake with a name attached. As long as the personal cost of being blamed exceeds the personal benefit of being right, the safe option wins whatever the comparison says.
In practice
- A procurement team with a better and cheaper bid in front of it selects the vendor everyone has heard of.
- A doctor ordering the additional test is protecting against the account of events, not only against the illness.
- Standing
- Compare the sucker effect and organisational justice; the mechanism is asymmetric personal risk rather than ignorance.
- Subject
- Decision-making & Reasoning
- Essay
- Paradoxes that broke theories, and sayings that outlived them