A Bank Sends Out a Notice That as a Result

question 158

Essay

A bank sends out a notice that as a result of a customer survey,the long-standing policy of the bank will change from "one monthly fee" to cover the usual customer banking activities,to a "fee for service," so that each individual service is charged a separate fee.The bank claims that the average amount of fees per customer will decrease.Many customers (almost all who didn't complete the survey)now complain in favor of the "one monthly fee" by saying "that's the way we've always had it." What behavioral economics concept would describe the complaining customers' behavior?

---

Definitions:

Residual Income

The amount of income that an individual or business has after all expenses and debts have been paid.

Return on Investment

A financial metric used to gauge the profitability of an investment, calculated by dividing the profit gained from an investment by the cost of the investment.

Operating Income

EBIT, which stands for Earnings Before Interest and Taxes, indicates a firm's profit derived specifically from its primary business activities.

Investment Turnover

A measure of a company's efficiency in using its assets to generate sales revenue; calculated as sales divided by the investment in assets.