Three attempts to replicate the behavioral sunk-cost effect: a note on cunha and caldieraro (2009)

Cunha and Caldieraro (2009) investigated whether sunk-cost effects, which are well documented in hypothetical situations involving monetary investments, also occur in choice situations with purely behavioral investments. Their results suggest that decision makers indeed fall prey to behavioral sunk-cost effects under certain circumstances. I have been unable to replicate their pattern of results in three separate investigations. In these studies, I attempted to recover the effect using two other behavioral effort manipulations in addition to the manipulation used by Cunha and Caldieraro. This failure to replicate the pattern of results calls into question the robustness of the initial findings.     

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 We also report new data from two unpublished experiments that are consistent with the BISC model, and we discuss the conditions under which purely behavioral sunk-cost effects are likely to be observed.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 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.     

Impact of decision goal on escalation

This research investigates the sunk-cost effect or escalation defined as the irrational tendency to choose to continue to invest money, time, or effort following unsuccessful investments. Building on previous research demonstrating a loss-sensitivity principle in sequential decision making, the hypothesis was proposed that a loss-minimization goal would lead to stronger effects of sunk outcomes (prior gains and losses) than would a gain-maximizing goal. The hypothesis was investigated in three experiments with undergraduates responding to investment decision scenarios. Although the tendency to continue investments was always larger for gain-maximizing than for loss-minimizing goal instructions, the sunk-outcome effect was stronger in the former case. However, when the decisions were personal and concerned lower stakes rather than business investments involving large amounts of money, the expected stronger effect of sunk outcomes was found for loss-minimizing goal instructions. Another finding was that the expected value was never ignored, thus suggesting that future research should focus on the joint effects of the expected value and sunk outcomes.     

Money does not stink: Using unpleasant odors as stimulus material changes risky decision making

Odors are strong elicitors of affect, and they play an important role in guiding human behavior, such as avoiding fire or spoiled food. However, little is known about how risky decision making changes when stimuli are olfactory. We investigated this question in an experimental study of risky decision making with unpleasant odors and monetary losses in a fully incentivized task with real outcomes. Odor and monetary decisions were matched so that monetary losses corresponded to the amount of money participants were willing to pay to avoid smelling an odor. Hierarchical Bayesian analyses using prospect theory show that participants were less sensitive to probabilities when gambling with odors than when gambling with money. These results highlight the importance of taking the sensory modality into account when studying risky decision making.     

Deciding Whether to Complete or Terminate an Unfinished Project: A Strong Test of the Project Completion Hypothesis

The primary purpose of this research was to subject Conlon and Garland's (1993; Garland & Conlon, 1998) project completion hypothesis to a stronger test than it has faced in the past. We conducted an experiment in which we manipulated the degree of completion, sunk-cost amount, and anticipated sales price for a hypothetical real estate development project. The sales price information allowed participants to calculate the economic value of the project. Participants were also held “accountable” in the sense that they had to explain the reasoning behind their decisions to the experimenter. Together, the sales price information and accountability stipulation created an inducement to engage in an economically rational decision process. In spite of this inducement, participants were unduly affected by the project's closeness to completion. In fact, when the project was close to being finished, they often recommended completing the project even when it was economically unwise to do so. While the effects of the project completion manipulation were surprisingly strong, the sunk-cost manipulation had virtually no effect. Implications of these results and directions for future research are discussed.     

Applying self-determination theory to understand the motivational impact of cash rewards: New evidence from lab experiments

We investigated, based on self-determination theory (SDT), the impact of the functional meaning of monetary rewards on individuals' motivation and performance and further tested the role of the psychological needs as the underlying mechanism. In two experimental studies, we show that when presented in an autonomy-supportive way, rewards lead participants to experience greater intrinsic motivation, which leads them to perform better, than when monetary rewards are presented in a controlling way. This is mediated by greater psychological need satisfaction, indicating that through greater feelings of competence, autonomy, and relatedness, individuals experience greater intrinsic motivation for the task at hand. Our findings suggest that rewards can have a distinct effect on individuals' motivation and performance depending on whether they take on an autonomy-supportive or controlling meaning, thus providing empirical evidence for the theoretical and practical implications of SDT's concept of functional meaning of rewards. By highlighting the importance of this concept, this research contributes to our understanding of the effectiveness of such rewards in the workplace, suggesting that they can foster employee motivation and performance if organisations present them to employees in an autonomy-supportive way to convey an informational meaning and positively contribute to their psychological need stisfaction.     

Escalation and De-escalation of Commitment in Response to Sunk Costs: The Role of Budgeting in Mental Accounting

Research has traditionally assumed that people increase investment (or "escalate commitment") in response to previous investments (sunk costs). This paper presents several demonstrations which show that people will incorrectly de-escalate investment in response to sunk costs. I propose that people set mental budgets to control their resource expenditures: they set a budget for a class of expenses and track their investments against their budget. A lab study with real monetary incentives shows support for de-escalation and supports a specific rule for how people set budgets - based on the breakeven of total costs and total benefits. The budgeting process suggests that people are only likely to escalate commitment when they fail to set a budget or when expenses are difficult to track. The later part of the paper organizes the previous literature on escalation around these processes and provides additional experiments to illustrate each point. For example, I argue that previous demonstrations that have shown errors of escalation exclusively involve "incidental" investments that are difficult to track. A study in the current paper shows that people are more willing to invest time than money to salvage a monetary sunk cost and more willing to invest money than time to salvage a sunk cost of time, even when the time and money investments are of equal value. The paper concludes by discussing the rationality of escalation and de-escalation.     

Salient Volunteering Behavior Increases Monetary Risk‐taking

Research finds that engaging in prosocial behavior has many positive psychological outcomes (e.g., enhanced well‐being, optimism, perceived control, and a boost in self‐concept), and research on monetary risk‐taking reveals these psychological outcomes are associated with increased risk‐taking. Merging these findings, we propose that when people's volunteering behavior is made salient in their minds, they take more monetary risks. Making research participants’ volunteering behavior salient by having them recall an act of prior volunteering (studies 1 and 3), choosing whether to volunteer (study 2), or choosing one of two volunteering activities (study 4), four experiments (and a fifth reported in the Appendix S2) reveal increased risk‐taking across several monetary‐risk outcomes (incentive‐compatible gambles, allocation of a windfall gain, and a behavioral risk‐taking measure involving escalating risk). Lastly, when the decision maker attributes a decision to volunteer to an external source, the effect of salient volunteering on monetary risk‐taking attenuates.     

The role of psychological resilience and positive affect in risky decision‐making

Past studies suggest that positive affect produces a wide range of desirable outcomes because it helps people build lasting resources. It may be assumed that these resources build on positive affect over time, which in turn may explain the beneficial effect of positive affect in stressful encounters. However, this assumption has not been directly tested by empirical studies. This question is important in that it helps clarify the underlying mechanism through which individuals with more positive affect might respond adaptively to adverse situations. Using a stressful task that included 20 rounds of risky investment choices, the current study examined whether psychological resilience, an important personal resource fuelled by positive affect, could account for the beneficial effects of positive affect. Specifically, we examined the relationship between individuals’ baseline levels of positive affect, their levels of psychological resilience, their choices in a risky investment decision task, and their levels of positive affect on the final investment task. The results demonstrate that psychological resilience could indeed help explain happier people's enhanced outcomes: They chose higher return although more risky investment options and experienced more positive affect at the end of the task. The current study supports the notion that individuals who experience frequent positive affect thrive through various challenges not simply because they feel good, but because they have resources that they can utilize to deal with these challenges. Findings from the present study support further investigation of the important relationship between specific positive affect, psychological resilience, and performance in risky investment tasks.     

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.     

金钱激励在社会排斥影响不确定性决策中的调节作用

研究从金钱补偿的视角考察社会排斥对不确定性决策的影响以及金钱激励的调节作用。实验发现,有金钱激励时,被排斥者在爱荷华赌博任务(Iowa gambling task,IGT)中的行为分数(组块2和3的选牌净分数和总的盈利分数)显著高于社会接纳者,表现为风险规避; 在无金钱激励时,被排斥者在IGT任务中的行为分数(组块4和5的选牌净分数和总的盈利分数)显著低于被接纳者,表现为风险寻求。实验结果表明社会排斥对不确定性决策的影响受到金钱激励的调制。     

Investing Even in Uneven Contests: Effects of Asymmetry on Investment in Contests

Many competitions, such as political campaigns, innovative endeavors, sports, or courting rituals, require investment of nonrefundable resources: One contestant wins the prize for the invested amount, whereas all others lose their investments without receiving compensation. Frequently, contests are asymmetric, because of differing resources or prize valuations. Does asymmetry discourage the weaker contestants from investing? Do stronger contestants take this into account and also invest less? Or does the desire to win abolish these differences? Two experiments explored the effects of asymmetry between the contestants—arising from their resources or prizes—on nonrefundable investments. Subjects repeatedly competed in both symmetric and asymmetric contests, enabling within‐subject comparisons. We observed an effect of asymmetry only when it concerned resources: Subjects overall invested less when their resources were unequal, whereas inequality in the prizes did not influence investments. This pattern suggests that winning itself is motivating. The changes between consecutive investments can be explained by reactions to the previous outcome (win or loss): Across all contests, investment decreased following a win and increased following a loss. Copyright © 2015 John Wiley & Sons, Ltd.     

The magnitude effect: Temporal discount rates and restaurant tips

Decision makers show a larger subjective temporal discount rate for small magnitudes than for large ones. That is, they demand a larger percent increase in value to compensate for a delay when they are waiting for a small amount of money than for a large amount. Prelec and Loewenstein (1991; see also Loewenstein & Prelec, 1992) proposed an increasing proportional sensitivity account of this magnitude effect. This account surmises that the magnitude effect stems from the utility function for money and is consequently not unique to intertemporal choice. One study tested this prediction by demonstrating the magnitude effect in two domains: intertemporal choice and tipping for restaurant meals, haircuts, and taxi rides. In intertemporal choice, subjects showed a larger discount rate for smaller monetary amounts. They also tipped a larger percentage on small bills than on large bills. Thus, both domains showed the magnitude effect; however, the size of the effect was not well correlated between domains.     

Experiential Avoidance as an Emotion Regulatory Function: An Empirical Analysis of Experiential Avoidance in Relation to Behavioral Avoidance,Cognitive Reappraisal,and Response Suppression

The purpose of the present study was to empirically test the suggestion that experiential avoidance in an emotion regulation context is best understood as an emotion regulatory function of topographically distinct strategies. To do this we examined whether a measure of experiential avoidance could statistically account for the effects of emotion regulation strategies intervening at different points of the emotion-generative process as conceptualized by Gross' (1998) process model of emotion regulation. The strategies under examination were behavioral avoidance, cognitive reappraisal, and response suppression. The specific hypotheses to be tested were (1) that behavioral avoidance, cognitive reappraisal, and response suppression would statistically mediate the differences in measures of psychological well-being between a clinical and nonclinical sample, but that (2) these indirect effects would be reduced to nonsignificant levels when controlling for differences in experiential avoidance. The results provide clear support for the first hypothesis with regard to all the studied strategies. In contrast to the second hypothesis, the results showed the predicted outcome pattern only for the response-focused strategy “response suppression” and not for cognitive reappraisal or behavioral avoidance. The results are interpreted and discussed in relation to theories on experiential avoidance and emotion regulation.     

金钱惩罚促进Stroop任务中的行为表现

本研究通过Stroop任务和修改版MIDT相结合,目的是考察不同额度金钱惩罚对Stroop任务行为表现的影响。结果发现：（1）无论是中性试次,一致试次还是不一致试次,金钱惩罚不仅减少了被试的行为反应时,而且提高了正确率;（2）非惩罚条件与惩罚条件下的冲突效应以及其他不同额度惩罚条件下的冲突效应差异不显著;（3）金钱惩罚对不一致试次反应时的影响与个体的惩罚敏感性呈显著负相关,而与奖赏敏感性无关。结果表明,金钱惩罚能够促进个体的一般行为表现,但是不会提高冲突抑制能力。同时,金钱惩罚对认知行为的影响与其惩罚敏感性密切相关。     

The basis of behavioral momentum in the nonlinearity of strength

The persistence of operant responding in the context of distractors and opposing forces is of central importance to the success of behavioral interventions. It has been successfully analyzed with Behavioral Momentum Theory. Key data from the research inspired by that theory are reanalyzed in terms of more molecular behavioral mechanisms: the demotivational effects of disruptors, and their differential impacts on the target response and other responses that interact with them. Behavioral momentum is regrounded as a nonlinear effect of motivation and reinforcement rate on response probability and persistence. When response probabilities are high, more energy is required to further increase or to decrease them than when they are low. Classic Behavioral Momentum Theory effects are reproduced with this account. Finally, it is shown how the new account involving motivation and competition is closely related to the metaphor of force and action that is at the core of Behavioral Momentum Theory.     

金钱惩罚促进Stroop任务中的行为表现

本研究通过Stroop任务和修改版MIDT相结合,目的是考察不同额度金钱惩罚对Stroop任务行为表现的影响。结果发现：（1）无论是中性试次,一致试次还是不一致试次,金钱惩罚不仅减少了被试的行为反应时,而且提高了正确率;（2）非惩罚条件与惩罚条件下的冲突效应以及其他不同额度惩罚条件下的冲突效应差异不显著;（3）金钱惩罚对不一致试次反应时的影响与个体的惩罚敏感性呈显著负相关,而与奖赏敏感性无关。结果表明,金钱惩罚能够促进个体的一般行为表现,但是不会提高冲突抑制能力。同时,金钱惩罚对认知行为的影响与其惩罚敏感性密切相关。     

临床决策偏差中的心理效应

临床决策是临床工作的核心。科学正确的临床决策是保证医疗服务质量的重要环节。现代心理学对临床决策的研究发现,由于决策双思维系统运转模式的存在,一些心理效应常常会导致临床决策出现系统性偏差或失误,这些心理效应包括易得性、拆分效应、锚定效应、框架效应、单次-重复博弈效应和后见之明效应等。医务人员了解这些心理效应的表现,熟悉它们对临床决策的潜在影响,并在进行重大临床决策时有效避免之,将会显著提升临床决策质量。     

Chairmen, Cocaine, and Car Crashes: The Knobe Effect as an Attribution Error

In this paper, we argue that the so-called Knobe-Effect constitutes an error. There is now a wealth of data confirming that people are highly prone to what has also come to be known as the ‘side-effect effect’. That is, when attributing psychological states—such as intentionality, foreknowledge, and desiring—as well as other agential features—such as causal control—people typically do so to a greater extent when the action under consideration is evaluated negatively. There are a plethora of models attempting to account for this effect. We hold that the central question of interest is whether the effect represents a competence or an error in judgment. We offer a systematic argument for the claim that the burden of proof regarding this question is on the competence theorist. We sketch an account, based on the notion of the reactive attitudes, that can accommodate both the idea that these sorts of judgments are fundamentally normative and that they often constitute errors.