Erratum to: A query theory account of the effect of memory retrieval on the sunk cost bias

The sunk cost bias occurs when individuals continue to invest in the same option when better alternatives are available. Many researchers believe that this bias is due to overemphasizing the past investment over the (missed) opportunities offered by alternatives. As an alternative or complement to this view, we show that memory retrieval and attention play important roles in the sunk cost bias. In two experiments, individuals generated more reasons for pursuing the invested option than for an alternative; they generated those reasons earlier in a sequence of reasons; and these effects increased as the individuals made progress toward attaining the reward yielded by the invested option. Associated with these effects, individuals perceived an increasingly wide gap in value between the invested and alternative options as they progressed toward the goal, thereby creating the sunk cost bias. Forcing individuals to reverse the order in which they generated reasons for the invested and alternative options reduced the bias.     

Let It Go: Positive Affect Attenuates Sunk Cost Bias by Enhancing Cognitive Flexibility

Sunk cost bias is a pervasive problem in consumer decision making. It occurs when people continue to invest resources toward unsuccessful outcomes merely because they previously invested in them. This tendency exists because people devote too much attention to prior investments without considering how other factors may impact their decision outcome. While many suggested interventions to attenuate sunk cost bias involve altering cognitive processes, we examine an alternate affective route. Specifically, we propose that inducing positive affect attenuates sunk cost bias by naturally facilitating flexible thought processes. Across four studies, using hypothetical and real decision tasks, we find that positive affect induced in three different ways consistently attenuates sunk cost bias involving money, time, and effort investments. Further, we demonstrate that this occurs because people experiencing positive affect have enhanced cognitive flexibility. They consider more relevant decision factors and perceive sunk cost as having less of an influence on their decision outcomes. Then, in a fifth study, we show that a thought intervention promoting flexibility can attenuate consumers’ suboptimal commitment tendency in a field setting.     

Sunk cost: pigeons (Columba livia), too, show bias to complete a task rather than shift to another

The sunk cost effect involves the bias to stay with an alternative because one has already invested resources, even when there is a better alternative available. In a series of experiments, at various points during a 30-peck requirement, pigeons (Columba livia) could choose between completing the response requirement (at a different location in Experiment 1 or the same location in Experiments 3 and 4) and switching to a constant number of pecks. In three experiments, the pigeons showed a bias to complete the pecks already started, even when that required more pecking. We also demonstrated that the bias depended on the initial investment and was not produced merely because the pigeons preferred a variable alternative over a fixed alternative. The deviation from optimal choice suggests that pigeons show a bias similar to the sunk cost effect in humans.     

Sunk Cost and Commitment to Medical Treatment

The influence of prior, irretrievable, investment (sunk cost) on commitment to medical treatment was investigated. Three studies were run investigating the influence of sunk cost in the form of money, time, and effort. A total of 637 participants (314 male) with a mean age of 19.58 years were recruited from an undergraduate population. A computer program simulated the process of arranging a course of physiotherapy. Participants invested one of three amounts of sunk cost (under budget, on budget, or over budget) into arranging sessions with a chiropractor. Participants then decided how much time they wished to commit to these chiropractor sessions or to an alternative treatment with a better chance of success. Results revealed a significant effect of invested money, a significant effect of invested effort, but no effect of invested time. Invested money produced a sunk cost effect, while invested effort appeared to exert influence via cognitive dissonance. The implications for healthcare decision-making are discussed.     

Is there a Sunk Cost Effect in Committed Relationships?

The sunk cost effect occurs when a prior investment in one option leads to a continuous investment in that option, despite not being the best decision. The aim of the present paper was to study the role of the sunk cost effect in committed relationships. In Experiment 1, participants (N = 902) were presented with an unhappy relationship scenario in which they needed to make a choice: to stay or end the relationship. Results showed that the likelihood of participants staying in the relationship was higher when money and effort, but not time, had been previously invested in that relationship. In Experiment 2, the time investment was manipulated and the sunk cost was evaluated using a different methodology. Specifically, instead of having a dichotomous decision, participants (N = 275) choose how much time they would be willing to invest in the relationship. Results revealed a sunk time effect, that is, participants were willing to invest more time in a relationship in which more time had already been invested.     

Sunk Cost,Emotion, and Commitment to Education

The influence of prior, irretrievable, investment (sunk cost) on commitment to a course of education was investigated. The moderating effects of the emotions of anger and fear over this commitment decision were also investigated. A total of 425 participants (214 male) with a mean age of 19.92 years were recruited from an undergraduate population. A computer program simulated the process of arranging to undertake a course of education. Participants were induced to feel either anger or fear and, then, invested one of three amounts of sunk cost (under budget, on budget, or over budget) to signing up for a course. Participants then decided how much time they wished to commit to this course or to an alternative, identical course with a better chance of success. Results revealed a significant sunk cost effect of prior investment on commitment to a course of education. Results also revealed that anger increased the magnitude of this sunk cost effect. Results did not reveal any effect of fear on the sunk cost effect. Theoretical implications and practical applications were discussed.     

Using the regulation of accuracy to study performance when the correct answer is not known

We examined memory performance in multiple‐choice questions when correct answers were not always present. How do participants answer when they are aware that the correct alternative may not be present? To answer this question we allowed participants to decide on the number of alternatives in their final answer (the plurality option), and whether they wanted to report or withhold their answer (report option). We also studied the memory benefits when both the plurality and the report options were available. In two experiments participants watched a crime and then answered questions with five alternatives. Half of the questions were presented with the correct alternative and half were not. Participants selected one alternative and rated confidence, then selected three alternatives and again rated confidence, and finally indicated whether they preferred the answer with one or with three alternatives (plurality option). Lastly, they decided whether to report or withhold the answer (report option). Results showed that participants’ confidence in their selections was higher, that they chose more single answers, and that they preferred to report more often when the correct alternative was presented. We also attempted to classify a posteriori questions as either presented with or without the correct alternative from participants’ selection. Classification was better than chance, and encouraging, but the forensic application of the classification technique is still limited since there was a large percentage of responses that were incorrectly classified. Our results also showed that the memory benefits of both plurality and report options overlap.     

Sunk Cost Effects: The Influences of Instruction and Future Return Estimates

Normative principles imply that decision makers′ choices should be affected solely by the prospective future consequences of the options. Previous work, however, has demonstrated the occurrence of sunk cost effects, whereby decision makers are reluctant to abandon options in which they have made prior investments. The present research shows that, contrary to earlier findings, there exist conditions under which sunk cost effects are reduced significantly by instruction in pertinent economic principles. Additional findings indicate that sunk cost effects are mitigated by an important factor that is often present in real-world decision situations but omitted in most sunk cost research paradigms-explicit estimates of the future returns the given options might yield. Theoretical and practical implications are developed and discussed, including possibly common ambiguities about what normative sunk costs principles imply and how they should be applied.     

Order Effects in Preference Judgments: Evidence for Context Dependence in the Generation of Preferences

This paper explores the cognitive processes at work in preference generation. It tests the hypothesis that the evaluation process relies on a comparative context of alternatives. Participants in two experiments reviewed pairs of options that included one superficially attractive option and another that was normatively superior in some way but superficially unattractive. Experiment 1 (N= 116) found that when the superficially attractive option was rated first, reported preferences for both options were higher than when the less attractive alternative was rated first. Experiment 2 (N= 177) replicated this order effect on preferences using six pairs of options. I obtained process measures that suggest the effect is attributable to the process by which people generate judgments of preference. Options are rated more positively to the extent that they compare favorably to other real or imagined alternatives; options are rated more negatively to the extent that they compare poorly to their alternatives. These two experiments contribute to the literature on preference generation by specifying a process by which people generate preferences.     

Job-decision inconsistencies involving social comparison information: the role of dominating alternatives

Previous research on joint versus separate preference reversals has demonstrated that individuals focus on social comparison information when they are evaluating a single option but focus on absolute salary when they are considering more than 1 option. Study 1 demonstrates that social comparison information is important in multiple option scenarios when an option favorable on social comparison dominates an inferior, 3rd alternative. Study 2 examines why dominating alternatives are so attractive by investigating the role that the value-shift, weight-change, and emergent-value models play in explaining the pattern of results obtained in Study 1. Results provide support for the value-shift and emergent-value models and further suggest that these 2 models may be interrelated, with justification (emergent-value model) mediating the relationship between the attractiveness of the attributes (value-shift model) and the attractiveness of the dominating alternative.     

No Time to Waste: Restricting Life‐Span Temporal Horizons Decreases the Sunk‐Cost Fallacy

In three studies, we examined the influence of restricted and expansive temporal horizons on the sunk‐cost fallacy. The sunk‐cost fallacy occurs when prior investments instead of future returns influence decisions about future investments. When making decisions about future investments, rational decision makers base decisions on future consequences, not already‐invested costs that are “sunk” and cannot be recovered. In Study 1, we restricted young adult college students' temporal horizons by instructing them to imagine that they did not have much longer to live; this manipulation decreased the sunk‐cost fallacy. In Study 2, we replicated Study 1 and also found that the consequences of manipulating temporal horizons were most pronounced for prior investments of time and that prior investments of time and money had different implications for the sunk‐cost fallacy, depending on the social or nonsocial decision domain. In Study 3, we manipulated temporal horizons by instructing students to imagine their time as a college student was coming to an end. Results were mostly similar to Study 2 but also suggested that focusing on one's mortality may have unique consequences. Implications of the three studies for understanding age differences in sunk‐cost decisions, interventions to improve sunk‐cost decisions, and the situations in which interventions might be most needed are discussed. Copyright © 2013 John Wiley & Sons, Ltd.     

Escalation of commitment with transparent future outcomes

A frequent case of irrational decision making is the tendency to escalate commitment to a chosen course of action after unsuccessful prior investments of money, effort, or time (sunk costs). In previous research it is argued that escalation does not occur when future outcomes and alternative investments are transparent. Inconsistent with this argument, in an experiment in which undergraduates were presented fictitious investment problems with sunk costs, escalation was demonstrated when full information was given about investment alternatives and estimates of future returns. Thus, it is indicated that people may escalate despite knowing that it will not make them economically better off. A more comprehensive understanding of escalation requires disentangling people's noneconomic reasons for escalation.     

沉没成本效应的产生根源与影响因素

沉没成本效应是指决策者的决策行为因受沉没成本影响而产生的一种非理性决策现象。针对这一决策偏差的产生根源,研究者从认知、动机和神经三个角度提出了解释。沉没成本效应的影响因素包括沉没成本特性、情境因素、个体差异和文化差异等。基于先前研究存在的问题和不足,沉没成本效应的未来研究应着眼于改进研究方法,探究产生根源,关注行为沉没成本和加强应用研究。     

Interval bias in 2AFC detection tasks: sorting out the artifacts

Proportion correct in two-alternative forced choice (2AFC) detection tasks often varies when the stimulus is presented in the first or in the second interval. Reanalysis of published data reveals that these order effects (or interval bias) are strong and prevalent, refuting the standard difference model of signal detection theory. Order effects are commonly regarded as evidence that observers use an off-center criterion under the difference model with bias. We consider an alternative difference model with indecision whereby observers are occasionally undecided and guess with some bias toward one of the response options. Whether or not the data show order effects, the two models fit 2AFC data indistinguishably, but they yield meaningfully different estimates of sensory parameters. Under indeterminacy as to which model governs 2AFC performance, parameter estimates are suspect and potentially misleading. The indeterminacy can be circumvented by modifying the response format so that observers can express indecision when needed. Reanalysis of published data collected in this way lends support to the indecision model. We illustrate alternative approaches to fitting psychometric functions under the indecision model and discuss designs for 2AFC experiments that improve the accuracy of parameter estimates, whether or not order effects are apparent in the data.     

The origins of cognitive dissonance: evidence from children and monkeys

In a study exploring the origins of cognitive dissonance, preschoolers and capuchins were given a choice between two equally preferred alternatives (two different stickers and two differently colored M&M's, respectively). On the basis of previous research with adults, this choice was thought to cause dissonance because it conflicted with subjects' belief that the two options were equally valuable. We therefore expected subjects to change their attitude toward the unchosen alternative, deeming it less valuable. We then presented subjects with a choice between the unchosen option and an option that was originally as attractive as both options in the first choice. Both groups preferred the novel over the unchosen option in this experimental condition, but not in a control condition in which they did not take part in the first decision. These results provide the first evidence of decision rationalization in children and nonhuman primates. They suggest that the mechanisms underlying cognitive-dissonance reduction in human adults may have originated both developmentally and evolutionarily earlier than previously thought.     

The Impact of Depression on Self–Other Discrepancies in Decision Making

Although there is a small but growing body of literature on how people make risky decisions for others and predict others' decisions, results seem to be contradictory. The authors contribute to the understanding of these mixed results by investigating how depression affects self–other discrepancies in decision making and the psychological processes that underlie these discrepancies. In an experiment, depressed and nondepressed individuals read a series of scenarios involving decisions about health, money, and interpersonal relationships. They then indicated which of two options they would choose for themselves or for another person, or predicted which option this person would choose for himself or herself. Finally, participants reported benefits and drawbacks of the decisions (i.e., cognitions) and feelings about risk. Depressed individuals were less prone to bias when they predicted others' decisions than nondepressed individuals. Feelings about risk played a key role in determining the direction and the magnitude of this bias. In contrast, both depressed and nondepressed individuals showed bias when they made decisions for others. This bias affected their decisions in opposing ways and was determined by cognitions. This bias is consistent with literature showing that depression is associated with an increased sensitivity to social risks. The authors provide a theoretical explanation of self–other discrepancies in decision making in depressed and nondepressed individuals and conclude that the results support the assumption that depression is associated with psychological processes whose role is to increase sensitivity to social threats rather than with a more general negative bias in cognitive functioning. Copyright © 2014 John Wiley & Sons, Ltd.     

Remembering chosen and assigned options

Recent studies have shown systematic choice-supportive memory for past choices, wherein people tend to overattribute positive features to options they chose and negative features to unchosen options (Mather & Johnson, 2000, Mather, Shafir, & Johnson, 2000). In contrast, the present experiments showed no choice-supportive memory bias for assigned options. Rather than having a general motivation to recall the chosen or the assigned option in a more positive light, people appear to be influenced by heuristics that vary with context: In recalling past choices, people expect the chosen option to contain more positive and fewer negative features than do its competitors. In recalling past assignments, in contrast, people expect the assigned option to be remembered better than the unassigned alternatives. This vividness heuristic leads to systematic misattribution of new features to unassigned alternatives, but not in a manner supportive of the assigned option. Some implications of these findings are discussed.     

Sunk Cost and Commitment to Dates Arranged Online

The influence of prior, irretrievable, investment (sunk cost) on commitment to a date arranged online was investigated. Participants were recruited from an undergraduate population. There were 145 participants (86 female) with a mean age of 19.42 years. Participants took part in a computer simulation of the process of arranging a date online. Participants invested one of five amounts of sunk cost into this process. Participants were then presented with the choice of attending the date arranged online or attending a (superior) blind date. Participants chose how much time that they wanted to commit to the (inferior) date arranged online. Results revealed a significant sunk cost effect (p = 0.003). The implications of the sunk cost effect having an influence over human relationships are discussed.     

Gaze behaviour during space perception and spatial decision making

A series of four experiments investigating gaze behavior and decision making in the context of wayfinding is reported. Participants were presented with screenshots of choice points taken in large virtual environments. Each screenshot depicted alternative path options. In Experiment 1, participants had to decide between them to find an object hidden in the environment. In Experiment 2, participants were first informed about which path option to take as if following a guided route. Subsequently, they were presented with the same images in random order and had to indicate which path option they chose during initial exposure. In Experiment 1, we demonstrate (1) that participants have a tendency to choose the path option that featured the longer line of sight, and (2) a robust gaze bias towards the eventually chosen path option. In Experiment 2, systematic differences in gaze behavior towards the alternative path options between encoding and decoding were observed. Based on data from Experiments 1 and 2 and two control experiments ensuring that fixation patterns were specific to the spatial tasks, we develop a tentative model of gaze behavior during wayfinding decision making suggesting that particular attention was paid to image areas depicting changes in the local geometry of the environments such as corners, openings, and occlusions. Together, the results suggest that gaze during a wayfinding tasks is directed toward, and can be predicted by, a subset of environmental features and that gaze bias effects are a general phenomenon of visual decision making.     

Juror Preference for Curative Alternative Verdicts for Veterans With PTSD

Two studies examined mock juror verdicts for veterans with PTSD in the criminal justice system. Mock jurors demonstrated a leniency toward treatment bias for veterans with PTSD who committed a violent crime, compared to a nonviolent crime. This leniency toward treatment bias occurred only when alternative verdict options, beyond guilty or not guilty, were available. In fact, a guilt bias was demonstrated by mock jurors when the only verdict options were guilty or not guilty, and a bias toward treatment was demonstrated when curative alternative verdicts were available. Implications for efforts to address the growing national problem of veterans with PTSD in the criminal justice system are discussed.