Optimism as modifier of escalation of commitment

To study whether optimism-pessimism modifies escalation of commitment, 52 undergraduates were told that they had made an unsuccessful investment, then they chose to continue or discontinue this investment. Optimism about future returns was induced in one group by varying the probability of a successful outcome from an initial low to medium, pessimism was induced in another group by varying this probability from an initial high to medium. Supporting the assumption of the manipulation, the results showed that optimistic participants preferred to continue investments whereas pessimistic participants preferred not to. As predicted, when the sunk cost increased, optimism led to escalation of commitment, whereas pessimism led to de-escalation of commitment. These effects were strengthened when probability of a successful outcome was ambiguous.     

The sunk cost effect with pigeons: some determinants of decisions about persistence

The sunk cost effect occurs when an individual persists following an initial investment, even when persisting is costly in the long run. The current study used a laboratory model of the sunk cost effect. Two response alternatives were available: Pigeons could persist by responding on a schedule key with mixed ratio requirements, or escape by responding on a second key. In Experiment 1, mean response requirements for persistence and escape were varied across conditions. Pigeons persisted (committing the sunk cost error) when persisting increased the mean response requirement only slightly but not when persisting was sufficiently nonoptimal. Experiment 2 explored more systematically combinations of ratios and probabilities assigned to the schedule key. Persistence varied with the ratio of the mean global response requirements for persistence and escape. In Experiment 3, transitions between ratios were signaled. This reduced nonoptimal persistence, and produced some instances of a reverse sunk cost error--escaping when persistence was optimal. In Experiment 4, it was optimal to escape after the second-smallest ratio ever presented. Pigeons escaped at approximately the optimal juncture, especially in conditions with added signals. Overall, this series of experiments suggests that the sunk cost error may arise in part because persistence is the default behavioral strategy in situations where the contingencies for escape and persistence are insufficiently disparate and/or it is relatively difficult to discriminate when to escape. The study also demonstrates the utility of animal models of complex decision making situations.     

The sunk‐time effect: An exploration

We explored the potential for a sunk‐cost effect in the realm of time. Questionnaire studies (Experiments 1–4) obtained a sunk‐time effect that was robust to manipulations of prospective value, individual versus group consequences, and the effort or enjoyment inherent in the time. Behavioral experiments (Experiments 5–7) also suggested a sunk‐time effect and found support for a personal responsibility by sunk‐cost interaction on choice behavior. We discuss theoretical implications and a potential connection to animal sunk‐cost phenomena. Copyright © 2008 John Wiley & Sons, Ltd.     

Preference-based escalation: A new interpretation for the responsibility effect in escalating commitment and entrapment

A prominent finding in escalating commitment and entrapment research is the “responsibility effect”: people invest more in a losing course of action or persist with it for longer if they themselves initiated this action (responsibility) as opposed to if it was assigned to them. We argue that this effect is driven by participants’ preferences. Responsible participants usually prefer the chosen alternative since they have chosen it themselves. Non-responsible participants, in contrast, represent a mix of persons who either favor or disfavor the chosen alternative. In two experiments, we demonstrate that responsible participants favor the chosen course of action more strongly than non-responsible participants do, that these preferences facilitate reinvestment in and persistence with the chosen course of action, and that responsibility has no effect over and above this effect of preferences. Non-responsible participants preferring the chosen course of action made similar reinvestments and exhibited similar persistence as responsible participants.     

The effect of decision risk and project stage on escalation of commitment

We investigate the joint effects of decision risk and the stage of project completion on escalation of commitment. In two experiments, we demonstrate that the effect of decision risk is moderated by project stage such that the decision risk has the strongest effect on escalation of commitment at the intermediate stage of project completion. This is due to the dynamic influences underlying escalation of commitment. Whereas the need for project information influences resource commitment at the initial stage of a project, the need for project completion affects resource allocation at the terminal stage. In contrast, motivation to commit resources is disproportionately low at the intermediate stage since both the need for project information and the need for project completion are relatively weak. As such, the decision to commit resources is most sensitive to the moderating effect of decision risk when the project is about half complete.     

The mental accounting of sunk time costs: why time is not like money

The sunk‐cost effect, an irrational attention to non‐recoverable past costs while making current decisions, has been documented widely in the domain of monetary costs. In this paper, I study the effect of past time investments on current decisions. In three experiments using choice situations, I demonstrate that the sunk‐cost effect is not observed for past investments of time, but the effect reappears when the investments are expressed as monetary quantities. I further propose that this ‘pseudo‐rationality’ is due to the fact that individuals lack the ability to account for time in the same way as they account for money. In two additional experiments, I facilitate the accounting of time and show that the irrational sunk‐cost effect reappears. In a final experiment, I test my propositions in a setting where subjects make real investments of time and subsequently make real choices. Copyright © 2001 John Wiley & Sons, Ltd.     

The sunk cost effect across species: A review of persistence in a course of action due to prior investment

The sunk cost effect is the bias or tendency to persist in a course of action due to prior investments of effort, money or time. At the time of the only review on the sunk cost effect across species (Arkes & Ayton, 1999), research with nonhuman animals had been ecological in its nature, and the findings about the effect of past investments on current choice were inconclusive. However, in the last decade a new line of experimental laboratory‐based research has emerged with the promise of revolutionizing the way we approach the study of the sunk cost effect in nonhumans. In the present review we challenge Arkes and Ayton's conclusion that the sunk cost effect is exclusive to humans, and describe evidence for the sunk cost effect in nonhuman animals. By doing so, we also challenge the current explanations for the sunk cost effect in humans, as they are not applicable to nonhumans. We argue that a unified theory is called for, because different independent variables, in particular, investment amount, have the same influence on the sunk cost effect across species. Finally, we suggest possible psychological mechanisms shared across different species, contrast and depreciation, that could explain the sunk cost effect.     

The effects of mortality salience on intergroup bias between minimal groups

We tested the hypothesis, derived from terror management theory, that mortality salience would increase intergroup bias between minimal groups. After assignment to groups, participants wrote about death or a neutral topic, and rated the personality characteristics of the ingroup and outgroup. Results supported the hypothesis.     

Learning to de-escalate: The effects of regret in escalation of commitment

The current research investigates whether and how individuals are able to learn from one escalation situation to another, hypothesizing that post-escalation regret will reduce subsequent escalation. In Experiment 1, individuals participated in an escalation task after escalating their commitments in a first escalation situation. In Experiment 2, participants’ regret was manipulated by asking them to imagine engaging in an escalation situation. The experiments expand our theoretical and practical understanding of how to prevent escalation of commitment by demonstrating that escalation-specific regret—either experienced from an earlier escalation or primed through imagining an escalation scenario—reduced subsequent escalation in a different context. The discussion focuses on the theoretical and practical impact of regret and emotions in general in escalation of commitment.     

Inventor perseverance after being told to quit: the role of cognitive biases

We find that approximately one third (29%) of independent inventors continue to spend money and 51% continue to spend time on projects after receiving highly diagnostic advice to cease effort. Using survey data from actual inventors, this paper studies the role of overconfidence, optimism, and the sunk‐cost bias in these decisions. We find that inventors are more overconfident and optimistic than the general population. We also find that optimism and past expenditures increased perseverance after being told to quit, while overconfidence in judgment ability had no effect. After being told to quit, optimists spend 166% more than pessimists and those having already spent, for example, $10 000 spend another $10 000. Copyright © 2007 John Wiley & Sons, Ltd.     

应激对风险和社会决策的影响

应激是有机体在受到真实或者潜在的威胁刺激时所表现出来的全身性非特异性反应, 伴随着紧张和焦虑的心理体验, 交感神经系统的兴奋, 糖皮质激素分泌的增多以及脑干−边缘系统−前额叶神经环路的改变。应激对个体在风险决策行为中的风险寻求和风险回避倾向, 社会决策行为中的利己和利他倾向都会产生重要影响。策略使用异常、习惯化和自动化反应增强、反馈学习过程以及奖惩敏感性的改变是应激影响决策行为的认知基础; 应激激素的分泌, 及杏仁核、前额叶等在决策过程发挥重要作用的脑区活动的改变则为应激作用于决策行为的神经基础。未来研究应重点关注：应激的个体差异与应激对决策影响效应多样性的关系; 综合多种指标对应激进行测量; 考察应激的时序效应; 揭示个体的最佳应激水平; 加强对慢性应激影响决策以及应激对决策影响效应可逆性的研究; 揭示应激影响决策的神经机制。     

The Influence of Compensation Method and Disclosure Level on Information Search Strategy and Escalation of Commitment

In this study we examined the extent to which compensation method and public disclosure influenced information search strategy and escalation of commitment. A laboratory experiment involving 182 student subjects employed a 3 (compensation: no-pay, salary, and contingent) by 2 (disclosure level: public and private) fully randomized, crossed design. Results show that in light of negative feedback concerning performance results of an investment portfolio, subjects whose initial allocation decisions were announced publicly reduced their search for prospective information, increased the search for retrospective information, and exhibited greater escalation of commitment than subjects who did not announce their initial investment strategy. The search for retrospective information and escalation of commitment was monotonically higher across the no-pay, salary, and contingent pay conditions respectively, while the search for prospective information decreased correspondingly. This study provides evidence that escalation of commitment is positively related to the search for retrospective information and negatively related to the search for prospective information. The results obtained from this experiment complement and extend prior work in the areas of accountability, cognitive dissonance and escalation of commitment. © 1997 by John Wiley & Sons, Ltd.     

The Impact of Trait Anxiety on Self‐frame and Decision Making

The present study investigated how trait anxiety influenced the formation of a self‐frame and decision making. Participants (N = 1044) responded to the Trait Anxiety Inventory. Those with trait anxiety scores ±1 Z score from the sample mean (N = 328) were recalled to respond to the self‐frame questionnaire. The results suggested that trait anxiety differences could result in differences in the editing of decision‐making information, thereby influencing the risky choice. Compared with the low trait anxiety group, participants from the high trait anxiety group showed a greater tendency to use negative vocabulary to construct their self‐frame and tended to choose conservative plans. Self‐frame suppressed the influence of trait anxiety on decision making. These results further confirmed the hypothesis that individual differences in personality traits might influence the processing of information in a framed decision task. Copyright © 2013 John Wiley & Sons, Ltd.     

The effects of authentic and contrived dissent on escalation of commitment in group decision making

Escalation of commitment refers to the tendency to persist with or even intensify losing courses of action. In this study, we examined whether authentic and contrived dissent reduces escalation in group decision making. Participants first individually indicated their preference on how to allocate money between two alternatives. Based on these individual preferences, homogeneous and heterogeneous three‐person groups were formed. In addition, group discussion was either structured by assigning one group member to play the role of a devil's advocate or was not structured. Results revealed that escalation tendencies over multiple decisions were reduced in heterogeneous groups that used the devil's advocacy procedure. The rationality of this behavior is discussed. Copyright © 2008 John Wiley & Sons, Ltd.     

The role of probability of success estimates in the sunk cost effect

The sunk cost effect is manifested in a tendency to continue an endeavor once an investment has been made. Arkes and Blumer (1985) showed that a sunk cost increases one's estimated probability that the endeavor will succeed [p(s)]. Is this p(s) increase a cause of the sunk cost effect, a consequence of the effect, or both? In Experiment 1 participants read a scenario in which a sunk cost was or was not present. Half of each group read what the precise p(s) of the project would be, thereby discouraging p(s) inflation. Nevertheless these participants manifested the sunk cost effect, suggesting p(s) inflation is not necessary for the effect to occur. In Experiment 2 participants gave p(s) estimates before or after the investment decision. The latter group manifested higher p(s), suggesting that the inflated estimate is a consequence of the decision to invest. Copyright © 2000 John Wiley & Sons, Ltd.     

The influence of prior choices on current choice

Three pigeons chose between random-interval (RI) and tandem, continuous-reinforcement, fixed-interval (crf-FI) reinforcement schedules by pecking either of two keys. As long as a pigeon pecked on the RI key, both keys remained available. If a pigeon pecked on the crf-FI key, then the RI key became unavailable and the crf-FI timer began to time out. With this procedure, once the RI key was initially pecked, the prospective value of both alternatives remained constant regardless of time spent pecking on the RI key without reinforcement (RI waiting time). Despite this constancy, the rate at which pigeons switched from the RI to the crf-FI decreased sharply as RI waiting time increased. That is, prior choices influenced current choice-an exercise effect. It is argued that such influence (independent of reinforcement contingencies) may serve as a sunk-cost commitment device in self-control situations. In a second experiment, extinction was programmed if RI waiting time exceeded a certain value. Rate of switching to the crf-FI first decreased and then increased as the extinction point approached, showing sensitivity to both prior choices and reinforcement contingencies. In a third experiment, crf-FI availability was limited to a brief window during the RI waiting time. When constrained in this way, switching occurred at a high rate regardless of when, during the RI waiting time, the crf-FI became available.     

On the Observability of Purely Behavioral Sunk-Cost Effects: Theoretical and Empirical Support for the BISC Model

There is growing interest in whether and how sunk-cost effects for purely behavioral investments occur. In this article, we further discuss Cunha and Caldieraro's (2009) Behavioral Investment Sunk Cost (BISC) model and reconcile Otto's (2010) results with the BISC model predictions. We also report new data from two unpublished experiments that are consistent with the BISC model, and we discuss the conditions under which purely behavioral sunk-cost effects are likely to be observed.     

The limited effects of power on satisfaction with joint consumption decisions

We conduct three experiments in which participants in dyads choose between two restaurants, each of which is preferred by only one participant, and one participant has the power to decide which restaurant both will patronize. We find that the power to make a joint decision increases satisfaction with the choice only when those involved have a competitive decision orientation, a weak or anonymous relationship, and the outcome they choose is subsequently available. Participants who have a cooperative orientation are satisfied whether or not they have power and whether or not the resulting choice is consistent with their initial preferences.