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Sunk Cost, Emotion, and Commitment to Education
Abstract
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 19.92years 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.
KeywordsSunk cost-Emotion-Decision-making-Education
... To support this Huang et al. (2019) propose that emotions and decision-making are intertwined. Consequently, emotions may be essential elements of decision-making (Schwarz, 2000;Lerner and Keltner, 2000;Barsade and Gibson, 2007;Baron, 2008;Coleman, 2010;Foo, 2011;Cardon et al., 2012;Cristofaro, 2019;Huang et al. 2019). ...
... Emotions in general (Vaestfjaell & Slovic, 2013), and anger in particular (Coleman, 2010;Lerner and Keltner, 2000) may affect retention and termination decisions. In general, the presence of negative emotions may increase the intention of decision-makers to terminate projects. ...
This research focuses on anger and sunk cost effects as sources of cognitive bias and also portfolio interactions in relation to the retention/termination decisions on projects. Departing from a traditionally narrow and quantitative perspective of traditional project appraisal, this study investigates a wider psychological view of investment project decisions within four project management groups. The thesis emphasises that the role of the specific emotion of anger is influenced by the past sunk cost of projects and the effects of a portfolio of projects across the whole firm.
In the sense that project retention is perceived to be a positive outcome of anger, it has arguably been neglected in empirical entrepreneurship and strategic decision-making research, but this study claims that the retention and termination of projects may be analysed using psychological theories of emotions. A case study based on a Palestinian holding company, therefore, investigates the influence of anger, the sunk cost effect and portfolio considerations on project retention and termination.
The holding company under study operates in an uncertain political context likely to be a rich laboratory eliciting high levels of anger, thus highlighting their role. This study conducts fifteen emotion assessment surveys using a STAXI-2 inventory and content and thematic analyses of fifteen interviews, adopting multi-levels of analysis, and claims to make contributions to the entrepreneurship, strategic decision-making and psychology literatures. The analysis reports that anger has an important emotional influence on decisions. It demonstrates three main findings, i.e. mostly positive associations between anger, the sunk cost effect and portfolio considerations and project retention. It also presents four subsidiary findings. Hope emerged as the second most important emotion and is claimed to be associated with project retention. Other emotions also co-exist with anger and may have influenced retention decisions, and findings reveal an association between corporate identity (i.e. a factor emerged from data) and project retention. Finally, in an atypical case, anger is found to encourage project termination.
... To support this Huang et al. (2019) propose that emotions and decision-making are intertwined. Consequently, emotions may be essential elements of decision-making (Schwarz, 2000;Lerner and Keltner, 2000;Barsade and Gibson, 2007;Baron, 2008;Coleman, 2010;Foo, 2011;Cardon et al., 2012;Cristofaro, 2019;Huang et al. 2019). ...
... Emotions in general (Vaestfjaell & Slovic, 2013), and anger in particular (Coleman, 2010;Lerner and Keltner, 2000) may affect retention and termination decisions. In general, the presence of negative emotions may increase the intention of decision-makers to terminate projects. ...
... Intriguingly, this preference persists even in the face of other, better options. One example for this was reported by Coleman (2010): In an experimental study about course choices in an educational context, participants chose investing more time into a course they had already invested in over investing in another course, even though that course was identical in content and promised significantly better results. The sunk-cost effect has been explained by an instinctive aversion towards "wasting" the earlier investment (Arkes & Blumer, 1985). ...
... This illustrates that by sticking to a line of reasoning, one protects and cements the first stage's outcomes. Research has shown that people prefer to stick to things they have already invested into, which is described by the sunk-cost effect (see Arkes & Blumer, 1985;Coleman, 2010). Consistent responses could thus mean that people are trying to protect their "investment" or just generally prefer to be consistent. ...
Previous studies have investigated moral decision‐making by using moral dilemmas that involve a single decision. This article extends this paradigm, introducing two‐stage scenarios to examine how moral decision‐making is influenced by previous decisions in the same narrative—especially whether people tend to stay consistent or to reconsider within a morally challenging situation. It further compares decision‐making between two‐stage and one‐stage scenarios. In Study 1 (N = 239), participants read scenarios requiring two successive decisions of harming one person to spare multiple people (utilitarian action), or vice versa (deontological action), within the same narrative. Second decisions were mostly found to be consistent with first decisions. Remarkably, inconsistent responding (switching) was robustly observed in about 29% of cases. Study 2 (N = 63), using one‐stage scenarios, showed that having made a previous decision in the same narrative generally decreased utilitarian responding. Potential explanations for these phenomena are discussed. The present article concludes that prior choices within the same setting significantly influence decision‐making. It also reveals the potential of gaining new insights using multiple‐stage scenarios in moral decision‐making research.
... Furthermore, Coleman [14] showed experimental evidence for a larger sunk-cost effect for participants in which anger was induced than participants who were induced to feel fear. [15] demonstrated, among other findings, that the sunk-cost effect was attenuated by reducing state negative affect through mindfulness meditation. ...
... Previous studies that investigated mechanisms of affect in sunk-cost situations (mentioned above) either used general trait affect (e.g., personality trait anxiety), or induced emotions that were not related to the sunk-cost scenario (e.g., anger in a study by Coleman [14]), both are incidental emotional states. The purpose of the present research is to investigate a closer link between 'integral' affective responses and the sunk-cost fallacy by measuring affective reaction caused directly by each sunk-cost scenario. ...
Continuing investing in a failing plan (i.e., the sunk-cost fallacy) is a common error that people are inclined to make when making decisions. It is impossible to get resources back that already have been invested. Hence, economic theory implies that decision makers’ decisions should only be guided by future gains and losses. According to the literature, the sunk-cost fallacy is driven by negative affect. Previous studies focused on negative incidental affect. We investigated, in contrast, whether the sunk-cost fallacy is caused by integral affect elicited by the specific decision context. Study 1 demonstrated a positive relationship between affective reaction and the sunk-cost fallacy. Study 2 replicated the finding in Study 1 in a within-subjects design, and demonstrated a full mediation of type of scenario (invest vs. non-invest) on the sunk-cost effect, mediated by integral affective reaction. A mediation using a within-subjects design additionally demonstrated that the effect is mediated by integral emotional responses experienced in relation to each scenario, and not by incidental emotional states that are unrelated to the scenarios. Study 3 replicated findings in the previous studies, and demonstrated that the relation between the sunk-cost fallacy and affect is moderated by justification. Participants who justified their decision were more resistant to the sunk-cost fallacy, and showed less negative affect elicited by the scenarios, than participants who did not justify their decision. Study 4 provided supporting evidence for our hypothesis by hindering conscious deliberation, and promoting reliance on affect, via cognitive load. The results showed that the relation between affect and the sunk-cost fallacy was stronger for participants under high cognitive load, than under low-load. The paper discussed how this research leads to new ways to protect against the sunk-cost fallacy in the discussion.
... Recent evidence indicates that negative emotions exacerbate the sunk-cost bias and escalation of commitment. In a laboratory experiment, Coleman (2010) found that anger increased the sunk-cost bias in an educational decision-making task. Moon, Hollenbeck, Humphrey, and Maue (2003) found that anxiety is associated with increased incidence of the sunk-cost bias as well. ...
... We examined the comparative influence of these two mediators in a simultaneous test. Furthermore, because mindfulness meditation reduces focus on the future and past (Mrazek et al., 2012(Mrazek et al., , 2013, which is correlated with more-negative affective states (Killingsworth & Gilbert, 2010), and negative affect is positively associated with the sunk-cost bias (Coleman, 2010;Moon et al., 2003), we also tested for two-step mediation through temporal focus and then negative affect, in that order. ...
This research investigates the debiasing effect of mindfulness meditation on the sunk cost bias. Four studies, one correlational and three experimental, suggest that increased mindfulness reduces the tendency to allow prior unrecoverable costs to influence current decisions. Study 1 served as an initial correlational demonstration of the positive relationship between trait mindfulness and resistance to the sunk cost bias. Studies 2a and 2b were laboratory experiments examining the effect of a brief (15-minute) mindfulness meditation induction on increased resistance to the sunk cost bias. Study 3 experimentally examined the mediating mechanisms of temporal focus and negative affect, finding that the sunk cost bias is attenuated by drawing one’s temporal focus away from the future or past and experiencing less negative affect, both of which were accomplished through mindfulness meditation.
... Recent evidence indicates that negative emotions exacerbate the sunk-cost bias and escalation of commitment. In a laboratory experiment, Coleman (2010) found that anger increased the sunk-cost bias in an educational decision-making task. Moon, Hollenbeck, Humphrey, and Maue (2003) found that anxiety is associated with increased incidence of the sunk-cost bias as well. ...
... We examined the comparative influence of these two mediators in a simultaneous test. Furthermore, because mindfulness meditation reduces focus on the future and past (Mrazek et al., 2012(Mrazek et al., , 2013, which is correlated with more-negative affective states (Killingsworth & Gilbert, 2010), and negative affect is positively associated with the sunk-cost bias (Coleman, 2010;Moon et al., 2003), we also tested for two-step mediation through temporal focus and then negative affect, in that order. ...
In the research reported here, we investigated the debiasing effect of mindfulness meditation on the sunk-cost bias. We conducted four studies (one correlational and three experimental); the results suggest that increased mindfulness reduces the tendency to allow unrecoverable prior costs to influence current decisions. Study 1 served as an initial correlational demonstration of the positive relationship between trait mindfulness and resistance to the sunk-cost bias. Studies 2a and 2b were laboratory experiments examining the effect of a mindfulness-meditation induction on increased resistance to the sunk-cost bias. In Study 3, we examined the mediating mechanisms of temporal focus and negative affect, and we found that the sunk-cost bias was attenuated by drawing one's temporal focus away from the future and past and by reducing state negative affect, both of which were accomplished through mindfulness meditation.
... 15,74 Scenarios similar to those that college students may encounter (e.g., continuing versus dropping a paid-for course when a better, free course becomes available; going on a date arranged by a paid-for online dating service versus a free date arranged by a friend) have been investigated. 75,76 Because the SCF has been extensively studied by economists, scenarios depicting business decisions (e.g., whether to invest a million dollars to develop an airplane after a rival company develops a better version of the same airplane) also have been used. 65,77,78 Aspects of the decision-making context that have been systematically compared include: gain/loss outcomes of prior decisions, 79 size of the prior investment, probability of future success, 80 reinvestment cost 81 and whether the prior investment is money or time. ...
... The prior investment (sunk cost) portrayed in hypothetical scenarios is often money, 65 typically amounts many people do not deal with on a daily basis-such as thousands or millions of dollars. 77,[83][84][85][86][87][88] Researchers have begun to consider other investment dimensions such as time 72,76,78,82,89 and effort. 69,90 Measurement Some vignettes present a choice between two options embedded within a single scenario. ...
We outline a contextual and motivational model of judgment and decision-making (JDM) biases across the life span. Our model focuses on abilities and skills that correspond to deliberative, experiential, and affective decision-making processes. We review research that addresses links between JDM biases and these processes as represented by individual differences in specific abilities and skills (e.g., fluid and crystallized intelligence, executive functioning, emotion regulation, personality traits). We focus on two JDM biases-the sunk-cost fallacy (SCF) and the framing effect. We trace the developmental trajectory of each bias from preschool through middle childhood, adolescence, early adulthood, and later adulthood. We conclude that life-span developmental trajectories differ depending on the bias investigated. Existing research suggests relative stability in the framing effect across the life span and decreases in the SCF with age, including in later life. We highlight directions for future research on JDM biases across the life span, emphasizing the need for process-oriented research and research that increases our understanding of JDM biases in people's everyday lives.
... The effect is magnified by rumination (van et al., 2013;Wong, 2018). Research demonstrates that emotions influence the escalation of commitment, for instance, induced anger amplifies the effect (Coleman, 2010;Tsai & Young, 2010) through influencing risk perception (Lerner & Keltner, 2000;Tsai & Young, 2010). ...
Emotion regulation is one of the factors affecting the performance in the financial markets and has been used as an explanation for some of the more puzzling economic behavior, with difficulties in regulating one’s emotions being associated with worse outcomes in trading and tasks that involve heuristics and biases. Using an investment task, a sunk cost task, and a three-item version of a cognitive reflection test (CRT), we wanted to inspect if emotional dysregulation, as measured by the Difficulties in Emotion Regulation Scale (DERS), would explain the results and if there are specific area(s) of emotion dysregulation that are more problematic for decision-making. The results indicate that for sunk cost and logical tasks (which comprise CRT), the difficulties in engaging in appropriate strategies for regulating emotions are related to diminished performance. Additionally, gender differences were observed. Among women, difficulties in maintaining goal-directed behavior and difficulties in engaging in emotion regulation strategies were related to poor performance on the CRT, whereas for men it was related to falling prey to the sunk cost effect. The main contribution is showing which facets of difficulties in regulating emotions, as measured by DERS, are related to performance on CRT, a financial sunk cost task and a complex financial task.
... In order to make a theoretical classification of the behavior of fan bond investors, let us assume a firm with marginal substitutable products and services, meaning goods which are unique, rare or having unique characteristics such as their quality, links to childhood memories or design (e.g., Lego, Apple, Wikipedia, a TV production companies, a firm selling collectors' items, or a favorite bakery or restaurant franchise). Besides monetary sunk costs, consumers of such firms face high emotional sunk costs if the supply is discontinued (e.g. because of bankruptcy, market retreat, or cancelation of production), since it is difficult to replace the emotional utility from these goods by substitutes from competitors (Arkes and Blumer 1985;Coleman 2010;Dimson and Spaenjers 2014;Thaler 1980). Therefore, a sunk supply instantaneously leads to a total depreciation of the invested time and money and probably also the social capital in form of social networks with other fan consumers. ...
... However, many empirical studies have found that sunk costs do affect the investment decisions of decision makers (Arkes & Blumer, 1985;Dawes, 1988;Sharp & Salter, 1997;Yang, Cheng, & Ni, 2009). When a firm manager is unwilling to drop an unfavorable investment project owing to the invested costs (i.e., sunk costs) and continues investing in it, this manager is having an irrational decision-making behavior called the sunk cost effect (Coleman, 2010;Keil et al., 2000;Sharp & Salter, 1997). Previous studies have mainly discussed the underlying causes of the sunk cost effect, such as cognitive dissonance (Chung & Cheng, 2018) and the possible moderators on the effect, such as project completion effect (Boehne & Paese, 2000;Jensen, Conlon, Humphrey, & Moon, 2011), information asymmetry (Shin, 2008), and decision types (Roth, Robbert, & Straus, 2015). ...
The purpose of this study is to explore how combined effect of feedback frequency of investment performance and manager's affective commitment on reduction of the sunk cost effect. To this end, we designed an experimental questionnaire to collect data from production managers of electronics manufacturing companies listed on Taiwanese stock markets and used a hierarchical regression model to examine the relationships among variables. The results from 336 samples showed that just considering performance feedback frequency or affective commitment does not necessarily reduce the sunk cost effect. Only high feedback frequency jointed with high affective commitment can suppress the willingness of manager to continue a disadvantageous investment project.
... Large down payments for gym memberships, for example, might result in increased gym attendance and have been discussed as commitment responses (Rachlin, 2000;Rachlin & Green, 1972). Interestingly, Coleman (2010a) found that even small differences in monetary initial investments for college courses increased the likelihood of self-reported time participants would dedicate to continuing their education. ...
The sunk cost effect, known as the degree to which an initial investment of time, effort, or money increases the likelihood of continued investment, and delay discounting, defined as how rapidly the subjective value of a reward declines as a function of the delay to its receipt, incorporate the role of temporally distant stimuli, but have not been evaluated simultaneously. One process that may link the two phenomena is the temporal attention hypothesis, which holds that the degree to which one perceives distant events as close to the present, and one’s ability to shift their temporal focus from now to not now, jointly contributes to the mechanism of delay discounting. The first of the two experiments showed that participants with higher subjective time perception (i.e., perceived distant objective time points as subjectively closer to the present) committed more sunk cost across hypothetical temporal gaps between the initial and terminal links, and exhibited lower rates of delay discounting than those with lower subjective time perception. In Experiment 2, the same sunk cost procedure was used, except that four temporal gap conditions were used that matched the time points used in the delay discounting task. Further, participants experienced either negative, neutral, or positively valenced income narratives, which have previously been shown to alter rates of delay discounting. Additionally, probed time points in the future and past subjective time perception tasks more closely matched those used in the delay discounting and sunk cost tasks, and both future and past subjective time perception were derived used Mazur’s (1987) hyperbolic model. A series of Quade non-parametric ANCOVAs failed to reveal a significant effect of income narrative on delay discounting, any measure of sunk cost, future or past subjective time perception, and past, present, and future temporal focus. Extra sum of squares tests revealed, however, that hyperboloid models of mean sunk cost and median indifference data across the three groups were better fit to separate curves than one curve. Hyperbolic decline in subjective time perception (Ln (k)) for future and past subjective time perception were strongly correlated and were combined together to form the measure joint time perception, which correlated with delay discounting, but did not correlate with any measure of sunk cost. Future subjective time perception was divided by past subjective time perception to form the measure of time perception index, which was only correlated with sunk cost measures, but not delay discounting. Overall sunk cost (i.e., terminal investment percentage of 5 initial investments subtracted by 35 initial investments) was directly correlated with delay discounting such that greater amounts of sunk cost related to lower rates of delay discounting, providing added evidence that the sunk cost effect may relate to lower rates of discounting. Implications, limitations, and future directions related to these findings are discussed.
... Caregiver reports may be biased in many ways; for example, caregivers might show inflated estimates of behavior problem severity because of parenting stress, or may overestimate behavior improvements due to sunk costs in therapy. [54][55][56] Because this study analyzed an existing, community-based data set, researchers had little control over and few measurements of treatment fidelity, data reporting procedures, and variability across agencies and populations. Additionally, with no control group, it is difficult to determine how treatment outcomes would compare with outcomes of no treatment. ...
Purpose: Behavior disorders in early childhood are linked to a variety of negative outcomes for both children and families. Parent–Child Interaction Therapy (PCIT), an evidence-based parent-training program, demonstrates large effect sizes in reducing child problem behavior for dyads who complete treatment; however, a high number of families seeking treatment in community-based settings terminate from PCIT prior to meeting the protocol’s strict graduation criteria. The purpose of this study was to examine the impact of PCIT on child behavior problems for families who received at least a small dose of PCIT but not enough to meet the strict mastery criteria required for graduation.
Patients and methods: This study employed one of the largest community research samples conducted with PCIT (2,787 children and their families across the state of Oregon, 1,318 with usable data) to determine how PCIT impacts both graduates and early terminators.
Results: While families who graduated from PCIT (17.7% of the sample) demonstrated a very large effect size in problem behavior intensity improvements (d=1.65), families who terminated treatment early, but after attending at least four treatment sessions (51.7% of the sample), still showed significant improvements in behavior problems with a medium-to-large effect size (d=0.70). In contrast, very early terminators (those attending fewer than four treatment sessions, 0.3% of the sample), demonstrated little improvement at the time of dropout from services (d=0.12).
Conclusion: Though early terminators in PCIT have previously been identified as treatment failures, the present study discusses the reconceptualization of “dropouts” in relation to some positive evidence of treatment outcomes, the implications for community-based service delivery, and possible future directions.
... However, in some cases, it may happen that the individual, even receiving a negative return, persists in an investment plan whose committed values cannot be recovered independently of future decisions, that is, they are classified as sunk costs (Coleman, 2010;Ho, Png, & Reza, 2014). ...
Purpose: The objective of this paper was to analyze the influence of the sunk cost effect in the decision-making process of Accounting and Business Administration undergraduate students of the Federal University of Rio Grande do Norte.
Methodology: The sample comprised 655 students, of which 347 were from the Accounting program and 308 from a Business Administration program. Data were collected through the application of structured questionnaires, based on the studies of Arkes and Blumer (1985), Rover, Wuerges, Tomazzia and Borba (2009) and Silva and Domingos (2010). After tabulation, the data were analyzed through descriptive statistics, as well as a Mann-Whitney U test to verify if there are differences between the answers of the Accounting and Business Administration students.
Results: The main results suggest that the amount of sunk cost can influence the occurrence of the sunk cost effect, and this evidence is perceived through the mean values, considering that the reduction of the amount of sunk cost is inversely proportional to the average disposition of the respondents in continue investing in the course of action. In addition, to identify that the investigated students take the sunk costs into consideration in the decision-making process, it is verified that there is no statistically significant difference between the medians of the respondents with regard to the questions that allow identifying the susceptibility to the sunk cost effect in the context of business decision-making.
Contributions of the Study: The study contributes to signal that the future professionals of Administration and Accounting are susceptible to the sunk cost effect, which can imply in a report of biased accounting information by future accountants, as well as biased decisions by future administrators. Furthermore, these results contrast previous evidence that suggests that agents from different areas of knowledge react differently to the presence of sunk costs.
... 17,18 Under the sunk cost effect, considering the substantial cash payout, decision-makers are unwilling to withdraw from an unfavorable project but only keep the project going for fear of instantly seeing the sunk costs turning into an immediate loss, which would finally cause serious losses. 22 Cognitive dissonance and sunk cost effect Cognitive dissonance refers to a situation involving conflicting attitudes, beliefs, and behaviors. 14 If a paradoxical situation exists between belief and behavior, decision-makers would be in an uneasy and anxious mental condition, which would force them to try desperately to find an explanation for the discordance. ...
Background
The sunk cost effect is the scenario when individuals are willing to continue to invest capital in a failing project. The purpose of this study was to explain such irrational behavior by exploring how sunk costs affect individuals’ willingness to continue investing in an unfavorable project and to understand the role of cognitive dissonance on the sunk cost effect.
Methods
This study used an experimental questionnaire survey on managers of firms listed on the Taiwan Stock Exchange and Over-The-Counter.
Results
The empirical results show that cognitive dissonance does not mediate the relationship between sunk costs and willingness to continue an unfavorable investment project. However, cognitive dissonance has a moderating effect, and only when the level of cognitive dissonance is high does the sunk cost have significantly positive impacts on willingness to continue on with an unfavorable investment.
Conclusion
This study offers psychological mechanisms to explain the sunk cost effect based on the theory of cognitive dissonance, and it also provides some recommendations for corporate management.
... Managers and decision-makers show a tendency to escalate their commitment to losing courses of action (Staw, 1976), "one of the most robust and costly decision errors addressed in the organizational sciences" (Sleesman, Conlon, McNamara, & Miles, 2012, p. 541). This tendency occurs in relation to how cognitively salient (and thus painful) past costs are (Strough, Schlosnagle, & DiDonato, 2011) but is also facilitated by focusing on the future, due to concerns about how to resolve those costs (Staw, 1981), and the experience of both negative affect (Coleman, 2010;Wong & Kwong, 2007) and self threat (Sleesman et al., 2012). ...
... Similar to single-response studies are multiple-response studies, also known as escalation of commitment (e.g., Coleman 2009Coleman , 2010Staw and Fox 1977). In both singleand multiple-response studies participants read a hypothetical scenario and have to make a choice between a losing course of action, in which a prior investment has been made, and a better alternative. ...
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.
... Managers and decision-makers show a tendency to escalate their commitment to losing courses of action (Staw, 1976;Staw, Barsade, & Koput, 1997), "one of the most robust and costly decision errors addressed in the organizational sciences" (Sleesman, Conlon, McNamara, & Miles, 2012, p. 541). This occurs as a function of how cognitively salient (and thus painful) past costs are (Strough, Schlosnagle, & DiDonato, 2011) but is also facilitated by focusing on the future, due to concerns about how to resolve those costs (Staw, 1981), and the experience of negative affect (Coleman, 2010;Moon, Hollenbeck, Humphrey, & Maue, 2003;Wong & Kwong, 2007). Consistent with this, state present moment focus has been found to reduce the incidence of the sunk-cost bias, the tendency to continue an endeavor once an investment in money, effort, or time has been made (Hafenbrack, Kinias, & Barsade, 2014), which is often a determinant of escalation of commitment (Sleesman et al., 2012). ...
I propose a theoretical model which specifies how state temporal focus, the time period in which the object of an individual’s thoughts exists at a given moment, influences individuals’ work behaviors. Drawing on the mechanisms of self- focus, task focus, and negative affect, I outline how state temporal focus can influence motivation, identity enactment, creativity, decision-making, learning, and sensemaking. In sum, I illuminate why and how state temporal focus shapes the way employees think, feel, and behave.
... In particular, NA may increase framing effects [19] and the perception of risk [21]. Anxiety may also increase risk aversion and increased tendencies toward the sunk-cost bias [33], as may anger [34]. Because many of these mood states affect decision making outside of the person's awareness, it is unlikely that an individual will be able to attribute his or her decision making process to the mood experienced at the time. ...
The decision sciences and mindfulness theory both focus on attention to thought processes and the exploration of the roots of those cognitions. Historically, these two models of viewing thought have, however, diverged. The decision sciences focus on better understanding the patterns and impacts of human decision making, particularly in instances of flawed decision making. Within this literature, mood state has been repeatedly shown to influence decision making patterns, with negative affect and anxiety increasing a person’s tendency toward decision making biases. Mindfulness emphasizes willingness to view one’s thoughts and behaviors from an open standpoint and has also been shown to be a valuable tool in reducing negative affect and anxiety. In this paper, we briefly explore both the decision sciences and mindfulness, including aspects of decision making that may be affected by mood. We also look to future directions in which mindfulness and the decision sciences could inform each other and lead to more effective interventions for problematic decision making tendencies. Through greater coordination between these two theoretical areas, it is possible that practical mechanisms of change may be more accessible.
The sunk cost bias, that is, people’s suboptimal tendency to continue to pursue previously invested options, has been found in many domains, and various mechanisms have been proposed. The current study offers a novel perspective for understanding sunk cost bias. Drawing on previous findings suggesting that sunk cost bias may be adaptive and promoted by fundamental motives, it is theorized that sunk cost bias may be a goal-oriented behavior in the mating domain and that this bias can extend to consumption domains (e.g., product/service with nonrefundable deposits, lotteries earned through prior effort, loyalty program memberships obtained through previous purchases) when mating cues are salient. One field study and seven experiments (six of which were pre-registered) demonstrated that mating cues strengthen an implemental mindset among men (vs. women). Consequently, men exhibit a stronger sunk cost bias in consumption when mating cues are salient. However, this effect was not found among women due to differences in their mating tactics. In addition, this article distinguishes sunk cost effect from status quo bias and rules out multiple alternative explanations for the results (including affect, overconfidence, the investment-payoff link, persistence, perceived morality, shame, guilt, and disgust associated with abandoning the original option).
Adults expect people to be biased by sunk costs, but young children do not. We tested between two accounts for why children overlook the sunk cost bias. On one account, children do not see sunk costs as causal. The other account posits that children see sunk costs as causal, but unlike adults, think future actions cannot make up for sunk costs. These accounts make opposing predictions about whether children should see sunk costs as affecting emotions. Across three experiments, 4–7-year-olds (total N = 320) and adults (total N = 429) saw stories about characters who collected items that were easy or difficult to obtain, and predicted characters' emotions and actions. At all ages, participants anticipated that characters would feel sadder about high-cost objects, but only adults predicted that characters would keep high-cost objects. Our findings show that children see incurred costs as causal, and that costs are integrated children's and adults' theory of emotions. Moreover, the findings suggest that developmental differences in sunk cost reasoning may rest in children's incomplete mental accounting. We also discuss children's reasoning about rational and irrational action.
Sunk cost bias is a pervasive issue in the real world, manifesting in various domains, such as consumption and investment, influencing consumer well‐being. This bias often leads to a misallocation of resources towards less meaningful activities. In the current study, we explored a novel factor, specifically disease cues, that influences the sunk cost bias. Through a survey and four systematic experiments, using both lab and natural manipulations of disease cues, we demonstrate that disease cues encourage individuals to overvalue their prior investments, leading to an increased propensity for sunk cost bias in imagined decision scenarios and real choices. We have also ruled out alternative explanations for our findings. Significantly, we added a survey to directly explore the sunk cost bias and consumer subjective well‐being, showing a significant positive relationship between them. Our research contributes to understanding consumer irrational behavior and aims to improve consumer well‐being.
The rate of return to education is the sum of discounted benefits and costs. It shows the relatively profitable sector for a secure investment. The main objective of this study is to review and analyze the volume of the rate of return to education. The literature review, survey design was used, and the materials were collected using purposive sampling. The analysis concludes that the rate of return on education can be analyzed based on the additional year of schooling, sex, levels of education, occupations, geographical regions, countries, and sectors. Different studies conducted in different countries reveal that the size of the rate of return differs according to the categories mentioned above. It means that overall returns to education seem highly heterogeneous. Likewise, most studies show that the private rate of returns for females is higher than that of males; the tertiary level's returns are higher than the other levels, and the urban sector's returns are higher than that of the rural sector.
Those making suicide attempts with highly lethal medical consequences are arguably the best proxy for those who die by suicide and represent a qualitatively different population from those making lower lethality attempts. Different factors influence the likelihood of a suicide attempt occurring and the lethality of that attempt. Both are important dimensions of risk. Older adults represent a distinct group in suicide research with unique risk factors that influence the lethality of their suicide attempts. This systematic review and meta-analysis summarises factors distinguishing those making high and low-lethality suicide attempts in older adults. Databases PsycINFO, PubMed (MEDLINE), Embase and CINAHL were systematically searched with seven of 1182 unique records included. Random effects meta-analyses were conducted on 18 variables in addition to a narrative synthesis regarding executive function. Only increased suicidal intent and planning meaningfully distinguished high from low-lethality attempters in meta-analyses. A large effect size was additionally observed for white ethnicity. Diminished alcohol use disorder prevalence and depression severity, and greater cognitive impairment, may be associated with high lethality attempters but further research is needed. Age and gender were not associated with lethality, contrary to adult populations. A narrative synthesis of studies exploring differences in executive functioning suggested high-lethality attempters were less likely to impulsively act on suicidal urges, allowing them to better plan suicide attempts that are more lethal, and are less likely to alter suicidal plans. Key limitations were that meta-analyses were underpowered to detect small effect sizes, and samples were largely white and limited to the US.
Şartlar değiştiyse kararı değiştirmek gelecekteki faydayı arttırabilir. Ancak insanlar genellikle önceki yaptıkları yatırımlarının, şu andaki kararlarını etkilemelerine izin vermektedir. Bu durum “batık maliyet” olarak tanımlanmaktadır. Bu çalışmanın amacı, “batık maliyet” etkisini açıklamaktır. Araştırma kapsamında, kamu/özel sektörde yönetici olan 294 kişiye kolayda örneklem yoluyla ulaşılmıştır. Katılımcılara, kullanım/karar gelişimine ilişkin varsayımsal 3 senaryo sorulmuştur. Analizlerde ki-kare ve korelasyon analizlerinden yararlanılmıştır. Senaryo 1’de katılımcıların %64’ü rasyonel bir karar vererek daha çok eğleneceklerini düşündükleri Bodrum Tatilini tercih etmiştir. Senaryo 2 ve 3’te katılımcıların batık maliyet etkisinde kaldıkları gözlemlenmiştir. Yüksek yatırım düzeyinde, katılımcıların %91,8’i batık maliyet etkisi altında kalarak projeyi devam ettirirken; düşük yatırım düzeyinde katılımcıların %46’sı yatırımı durdurma kararı vermiştir. Ayrıca batık maliyet etkisinin ortaya çıkmasında “kaynakları israf etmiş olmamak” niyetinin çok etkili olduğu tespit edilmiştir.
The widespread use of “self-executing” contracts is now only a question of time. For certain standard contract types with simple and well understood provisions, little international variation, no intermediation and short execution periods, that time is now as the change is already happening (examples are digital rights management and various banking applications.). It is the other more complex, more entrenched, and less agile sectors of the global economy which are the focus of this paper. Here there will be hurdles to overcome and more time needed for implementation—it will be a difficult task. The arrival of this new technology presents important questions about the future of contracting, as well as about traditional legal practice within both legal departments and law firms, calling for a new quality of cooperation between business and their lawyers. Given that the natural reaction to change is resistance, that companies are having ever-greater challenges navigating international regulation and that as a result legal department within companies tend to exert a strong influence out of line with the number of employees they include, the power of institutional resistance to delay adoption of the change will be considerable. This chapter will seek to add a dose of realism to the techno-optimists in the late adolescence of the 21st century for whom the change is so far advanced it is practically finished. In this chapter it is largely assumed that readers understand how Distributed Ledger Technology works, and the principal focus will be on the contractual challenges standing in the way of the implementation of “self-executing contracts,” to which it will also offer some solutions. The original idea contained in this chapter is to embark on a well-planned Digital Contract Optimization journey, supported by new technologies, as a means to manage various risks associated with algorithmically driven processes. This chapter will address the question of the institutional legal mindset as a potential delaying factor and will present a Darwinian argument to explain that change is inevitable and will be radical in terms of the new demands on lawyers.
How can universities build ongoing, committed relationships with students, able to withstand the financial and emotional challenges of studying in higher education? The research proposes that students’ ongoing attachment to their university, based on positive feelings towards the university, is an important aspect of the student experience. This ongoing attachment is conceptualised here as students’ affective commitment towards their institution. Using an online survey-method and a research sample comprising undergraduate students studying in the UK, this research identifies three factors which drive students’ affective commitment towards their institution. These factors include students’ affective commitment towards academics and students’ calculative commitment towards the institution; factors which draw from the relational literature. A third factor, commitment balance, was developed within this research. Commitment balance occurs when a student’s commitment to their university is perceived to be reciprocated by the university’s commitment to the student. The study found that commitment balance was the most important driver of students’ ongoing attachment to their institution. The paper proposes that commitment balance is a key idea to consider within relational studies generally, but has a particular relevance in the higher education context for understanding the student experience. Commitment balance reflects the pulse of reciprocity which energises relational exchanges between students and institution. The findings of this research reinforce how critically important it is for universities and academics to build relationships with students. The desired outcome is to enhance the student experience, create positive attachment between students and university and ultimately improve student retention.
Menschen nehmen sich immer wieder vor ihr Leben zum Positiven zu verändern. In der Praxis gibt es zahlreiche Dienstleister, die Angebote zur Zielerreichung bereitstellen. Kultureinrichtungen sorgen für Bildung und Sportanlagenbetreiber helfen den Menschen körperlich in Form zu kommen. Viele dieser Dienstleistungen werden in Pauschaltarifen angeboten. In Bezug auf die Konsumentenrente ist die Wahl eines solchen Tarifs häufig nicht optimal. Am Beispiel eines Entscheidungsexperiments und den Transaktionsdaten eines Fitnessstudios analysiert Thomas Robbert den Einfluss der Tarifwahl auf nachgelagerte Nutzungsprozesse. Dabei zeigt er, dass auch der Wille sich ökonomisch an ein Verhalten zu binden (Precommitment) die Wahl eines Pauschaltarifs begünstigen kann. Aus dieser Erkenntnis leitet der Autor Konsequenzen für die Tarifgestaltung ab.
Objective:
The propensity of people vulnerable to suicide to make poor life decisions is increasingly well documented. Do they display an extreme degree of decision biases? The present study used a behavioral-decision approach to examine the susceptibility of low-lethality and high-lethality suicide attempters to common decision biases that may ultimately obscure alternative solutions and deterrents to suicide in a crisis.
Method:
We assessed older and middle-aged (42-97 years) individuals who made high-lethality (medically serious) (n = 31) and low-lethality suicide attempts (n = 29). Comparison groups included suicide ideators (n = 30), nonsuicidal depressed participants (n = 53), and psychiatrically healthy participants (n = 28). Attempters, ideators, and nonsuicidal depressed participants had nonpsychotic major depression (DSM-IV criteria). Decision biases included sunk cost (inability to abort an action for which costs are irrecoverable), framing (responding to superficial features of how a problem is presented), underconfidence/overconfidence (appropriateness of confidence in knowledge), and inconsistent risk perception. Data were collected between June 2010 and February 2014.
Results:
Both high- and low-lethality attempters were more susceptible to framing effects as compared to the other groups included in this study (P ≤ .05, ηp(2) = 0.06). In contrast, low-lethality attempters were more susceptible to sunk costs than both the comparison groups and high-lethality attempters (P ≤ .01, ηp(2) = 0.09). These group differences remained after accounting for age, global cognitive performance, and impulsive traits. Premorbid IQ partially explained group differences in framing effects.
Conclusions:
Suicide attempters' failure to resist framing may reflect their inability to consider a decision from an objective standpoint in a crisis. Failure of low-lethality attempters to resist sunk cost may reflect their tendency to confuse past and future costs of their behavior, lowering their threshold for acting on suicidal thoughts.
Procedures used to induce affect in a laboratory are effective and well-validated. Given recent methodological and technological advances in Internet research, it is important to determine whether affect can be effectively induced using Internet methodology. We conducted a meta-analysis and systematic review of prior research that has used Internet-based affect induction procedures, and examined potential moderators of the effectiveness of affect induction procedures. Twenty-six studies were included in final analyses, with 89 independent effect sizes. Affect induction procedures effectively induced general positive affect, general negative affect, fear, disgust, anger, sadness, and guilt, but did not significantly induce happiness. Contamination of other nontarget affect did not appear to be a major concern. Video inductions resulted in greater effect sizes. Overall, results indicate that affect can be effectively induced in Internet studies, suggesting an important venue for the acceleration of affective science. (PsycINFO Database Record
(c) 2015 APA, all rights reserved).
This investigation examined the influence of emotional attributions on the relevance of current feelings to judgments of personal satisfaction. In the first three studies, subjects were led to make different attributions for their naturally occurring feelings and then asked to judge their personal satisfaction. Satisfaction was higher after situational and specific attributions than after general and self-referential attributions, but only in domains that were unrelated to the causes to which subjects attributed their feelings. Study 4 tested whether affective states such as emotions with clearly defined causes are less relevant to judgments of life satisfaction than more diffuse states such as moods. Satisfaction was elevated after a laboratory mood induction only when subjects were led to focus on their moods in ways characteristic of emotional states (by articulating specific causes and labels for their feelings). These studies illuminate the role of emotional attribution in judgements of personal satisfaction.
This investigation examined the influence of emotional attributions on the relevance of current feelings to judgments of personal satisfaction. In the first three studies, subjects were led to make different attributions for their naturally occurring feelings and then asked to judge their personal satisfaction. Satisfaction was higher after situational and specific attributions than after general and self-referential attributions, but only in domains that were unrelated to the causes to which subjects attributed their feelings. Study 4 tested whether affective states such as emotions with clearly defined causes are less relevant to judgments of life satisfaction than more diffuse states such as moods. Satisfaction was elevated after a laboratory mood induction only when subjects were led to focus on their moods in ways characteristic of emotional states (by articulating specific causes and labels for their feelings). These studies illuminate the role of emotional attribution in judgments of personal satisfaction.
Prior irreversible investments of money, time, or effort referred to as sunk costs frequently lead to decisions to continue a chosen course of action despite that this is irrational. With the aim of demonstrating that such escalation of commitment is a special case of a more general phenomenon, two experiments were carried out employing undergraduates as participants. Experiment 1 showed for fictitious personal and business investment scenarios that both prior losses and gains (sunk outcomes) affected choices to continue or discontinue the investment. In Experiment 2 the effect of sunk outcomes was reduced although not eliminated by a monetary bonus that in one condition depended on the future outcomes of the second gamble in two-stage gambles, in another condition on the future returns in personal investment scenarios. In support of a more inclusive theory subsuming escalation of commitment, the decisions were affected by both past and future outcomes and both gains and losses.
Two studies examined how discrete emotions influence escalation of commitment. Study 1 demonstrated that anger was associated with more escalation of commitment than fear in a personnel hiring-appraisal context. In addition, it revealed the mediating effect of risk perception; angry compared to fearful individuals perceived lower risk in their initial decision, which in turn increased the tendency to escalate commitment. Study 2 replicated the pattern of results of Study 1 in a financial decision-making situation. Contrary to conclusions drawn from the results of prior research, the current studies suggest that not all negative emotions alleviate escalation of commitment.
Three experiments were conducted to examine the combined effects of sunk costs and negative feedback on decisions to escalate or withdraw from a petroleum-exploration venture. In Exps 1 and 2, petroleum geologists responded to scenarios in which from 1 to 4 dry wells had been drilled. Number of dry wells was manipulated both between Ss (Exp 1) and within Ss (Exp 2). Contrary to earlier research, the higher the sunk cost (i.e., the greater the number of dry wells), the less likely geologists were to authorize funds to continue with the venture and the lower their estimates were of the likelihood that the next well would be productive. In Exp 3, university students responded to our oil-drilling scenarios. Results of this experiment were in the same direction as that found with the geologists but were considerably weaker and were not statistically significant. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
discuss [the authors' communicative] theory of [emotions as managed goals] / present the original version of their theory, discuss some tests and criticisms of it, discuss the relation between this and other theories, and then present a revised version of the theory / begin with the assumption that emotions are based on signals within the brain that reflect priorities of goals and that predispose people toward appropriate classes of action / happiness, for example, encourages people to continue doing what they are doing, whereas sadness signals an interrupt / their theory accounts for basic emotions, derived emotions, and mixed emotions / discuss the implications of their theory for attachment, psychopathology, vicarious emotions, and the interaction between emotion and intellectual performance (PsycINFO Database Record (c) 2012 APA, all rights reserved)
In order to avoid the appearance of wastefulness people may be motivated to make choices that compromise their own self-interest. In Experiment 1 subjects learned that Mr Munn didn't take advantage of a ‘three-pack’ which would have enabled him to see three movies for 5 per movie. Most subjects predicted that after having attended two movies at the regular price, Mr Munn would then be unwilling to purchase a ticket to attend a potentially enjoyable third movie, either because he would consider such a purchase to be wasteful or because he would be angry at having eschewed the ‘three-pack’. In Experiment 2 subjects who could use an obsolete product to ‘trade-up’ to a new model were more likely to buy the new model than were subjects who could purchase it at the identical low price. It was hypothesized that utilizing an obsolete product to obtain a new model would seem less wasteful than making an outright purchase of the new model. In Experiment 3 a large majority of subjects faced with a sunk cost situation persevered with the failing project if the alternative was selling the material ‘for its scrap value’. However, if the alternative consisted of selling the materials for an identical price to someone who could use them, then subjects were less likely to persevere with the failing project. Marketing implications and the propriety of retrospective evaluation of prior decisions were also discussed.
Most theories of affective influences on judgement and choice take a valence-based approach, contrasting the effects of positive versus negative feeling states. These approaches have not specified if and when distinct emotions of the same valence have different effects on judgement. In this article, we propose a model of emotion-specific influences on judgement and choice. We posit that each emotion is defined by a tendency to perceive new events and objects in ways that are consistent with the original cognitive-appraisal dimensions of the emotion. To pit the valence and appraisal-tendency approaches against one another, we present a study that addresses whether two emotions of the same valence but differing appraisals—anger and fear—relate in different ways to risk perception. Consistent with the appraisal-tendency hypothesis, fearful people made pessimistic judgements of future events whereas angry people made optimistic judgements. In the Discussion we expand the proposed model and review evidence supporting two social moderators of appraisal-tendency processes.
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. Copyright © 2007 John Wiley & Sons, Ltd.
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 19.58years 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.
KeywordsSunk cost-Decision-making-Healthcare
There has long been interest in describing emotional experience in terms of underlying dimensions, but traditionally only two dimensions, pleasantness and arousal, have been reliably found. The reasons for these findings are reviewed, and integrating this review with two recent theories of emotions (Roseman, 1984; Scherer, 1982), we propose eight cognitive appraisal dimensions to differentiate emotional experience. In an investigation of this model, subjects recalled past experiences associated with each of 15 emotions, and rated them along the proposed dimensions. Six orthogonal dimensions, pleasantness, anticipated effort, certainty, attentional activity, self-other responsibility/control, and situational control, were recovered, and the emotions varied systematically along each of these dimensions, indicating a strong relation between the appraisal of one's circumstances and one's emotional state. The patterns of appraisal for the different emotions, and the role of each of the dimensions in differentiating emotional experience are discussed.
SINCE SS IN BEM'S (SEE 41:7) "INTERPERSONAL REPLICATION OF THE FESTINGER-CARLSMITH EXPERIMENT" WERE NOT INFORMED THAT THE AMOUNT THE PERSON THEY OBSERVED WAS PAID WAS INDEPENDENT OF HIS INITIAL ATTITUDE, BEM'S RESULTS ARE OPEN TO THE ALTERNATIVE INTERPRETATION THAT SS ASSUMED THE PERSON'S ATTITUDE DETERMINED THE AMOUNT HE WAS PAID. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
In keeping with cognitive appraisal models of emotion, it was hypothesized that sadness and anger would exert different influences on causal judgments. Two experiments provided initial support for this hypothesis. Sad Ss perceived situationally caused events as more likely (Experiment 1) and situational forces more responsible for an ambiguous event (Experiment 2) than angry Ss, who, in contrast, perceived events caused by humans as more likely and other people as more responsible. Experiments 3, 4, and 5 showed that the experience of these emotions, rather than their cognitive constituents, mediates these effects. The nonemotional exposure to situational or human agency information did not influence causal judgments (Experiment 3), whereas the induction of sadness and anger without explicit agency information did (Experiments 4 and 5). Discussion is focused on the influence of emotion on social judgment.
Currently, there are 2 conflicting frameworks with which to understand why decision makers might escalate their commitment to a previously chosen course of action: sunk costs and project completion. The author proposes that sunk costs and need to complete exert simultaneous pressures, both independent and interactive, on a decision maker's level of commitment. The responses of 340 participants were analyzed and supported a complementary relationship between the 2 predictors. In addition, sunk costs demonstrated a curvilinear influence on commitment and an interaction with level of completion that supported a Level of Completion x Sunk Cost moderation model. (A marginal utility model was not supported.) Results are discussed in terms of their relevance toward offering a complementary view of 2 potential antecedents to a decision maker's propensity to escalate his or her commitment to a previously chosen course of action.
The sunk cost effect is manifested in a greater tendency to continue an endeavor once an investment in money, effort, or time has been made. Evidence that the psychological justification for this behavior is predicated on the desire not to appear wasteful is presented. In a field study, customers who had initially paid more for a season subscription to a theater series attended more plays during the next 6 months, presumably because of their higher sunk cost in the season tickets. Several questionnaire studies corroborated and extended this finding. It is found that those who had incurred a sunk cost inflated their estimate of how likely a project was to succeed compared to the estimates of the same project by those who had not incurred a sunk cost. The basic sunk cost finding that people will throw good money after bad appears to be well described by prospect theory (D. Kahneman & A. Tversky, 1979, Econometrica, 47, 263–291). Only moderate support for the contention that personal involvement increases the sunk cost effect is presented. The sunk cost effect was not lessened by having taken prior courses in economics. Finally, the sunk cost effect cannot be fully subsumed under any of several social psychological theories.
This paper re‐examines the commonly observed inverse relationship between perceived risk and perceived benefit. We propose that this relationship occurs because people rely on affect when judging the risk and benefit of specific hazards. Evidence supporting this proposal is obtained in two experimental studies. Study 1 investigated the inverse relationship between risk and benefit judgments under a time‐pressure condition designed to limit the use of analytic thought and enhance the reliance on affect. As expected, the inverse relationship was strengthened when time pressure was introduced. Study 2 tested and confirmed the hypothesis that providing information designed to alter the favorability of one's overall affective evaluation of an item (say nuclear power) would systematically change the risk and benefit judgments for that item. Both studies suggest that people seem prone to using an ‘affect heuristic’ which improves judgmental efficiency by deriving both risk and benefit evaluations from a common source—affective reactions to the stimulus item. Copyright © 2000 John Wiley & Sons, Ltd.
This paper re-examines the commonly observed inverse relationship between per- ceived risk and perceived benefit. We propose that this relationship occurs because people rely on aÄect when judging the risk and benefit of specific hazards. Evidence supporting this proposal is obtained in two experimental studies. Study 1 investigated the inverse relationship between risk and benefit judgments under a time-pressure condition designed to limit the use of analytic thought and enhance the reliance on aÄect. As expected, the inverse relationship was strengthened when time pressure was introduced. Study 2 tested and confirmed the hypothesis that providing information designed to alter the favorability of one's overall aÄective evaluation of an item (say nuclear power) would systematically change the risk and benefit judgments for that item. Both studies suggest that people seem prone to using an 'aÄect heuristic' which improves judgmental eÅciency by deriving both risk and benefit evaluations from a common source — aÄective reactions to the stimulus item. Copyright # 2000 John Wiley & Sons, Ltd.
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.
Presents the American Psychological Association's Ethics Code. The document consists of an introduction, a preamble, 6 general principles, and specific standards and rules for conduct by psychologists. Topics covered by the standards include (1) General Standards, (2) Evaluation, Assessment or Intervention, (3) Advertising and Other Public Statements, (4) Therapy, (5) Privacy and Confidentiality, (6) Teaching, Training Supervision, Research, and Publishing, (7) Forensic Activities, and (8) Resolving Ethical Issues. (0 ref) (PsycINFO Database Record (c) 2012 APA, all rights reserved)
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 19.42years. 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.
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.
It is commonly expected that individuals will reverse decisions or change behaviors which result in negative consequences. Yet, within investment decision contexts, negative consequences may actually cause decision makers to increase the commitment of resources and undergo the risk of further negative consequences. The research presented here examined this process of escalating commitment through the simulation of a business investment decision. Specifically, 240 business school students participated in a role-playing exercise in which personal responsibility and decision consequences were the manipulated independent variables. Results showed that persons committed the greatest amount of resources to a previously chosen course of action when they were personally responsible for negative consequences.
The economic theory of the consumer is a combination of positive and normative theories. Since it is based on a rational maximizing model it describes how consumers should choose, but it is alleged to also describe how they do choose. This paper argues that in certain well-defined situations many consumers act in a manner that is inconsistent with economic theory. In these situations economic theory will make systematic errors in predicting behavior. Kanneman and Tversey's prospect theory is proposed as the basis for an alternative descriptive theory. Topics discussed are: undeweighting of opportunity costs, failure to ignore sunk costs, scarch behavior choosing not to choose and regret, and precommitment and self-control.
A THEORY OF SELF-PERCEPTION IS PROPOSED TO PROVIDE AN ALTERNATIVE INTERPRETATION FOR SEVERAL OF THE MAJOR PHENOMENA EMBRACED BY FESTINGER'S THEORY OF COGNITIVE DISSONANCE AND TO EXPLICATE SOME OF THE SECONDARY PATTERNS OF DATA THAT HAVE APPEARED IN DISSONANCE EXPERIMENTS. IT IS SUGGESTED THAT THE ATTITUDE STATEMENTS WHICH COMPRISE THE MAJOR DEPENDENT VARIABLES IN DISSONANCE EXPERIMENTS MAY BE REGARDED AS INTERPERSONAL JUDGMENTS IN WHICH THE O AND THE OBSERVED HAPPEN TO BE THE SAME INDIVIDUAL AND THAT IT IS UNNECESSARY TO POSTULATE AN AVERSIVE MOTIVATIONAL DRIVE TOWARD CONSISTENCY TO ACCOUNT FOR THE ATTITUDE CHANGE PHENOMENA OBSERVED. SUPPORTING EXPERIMENTS ARE PRESENTED, AND METATHEORETICAL CONTRASTS BETWEEN THE "RADICAL" BEHAVIORAL APPROACH UTILIZED AND THE PHENOMENOLOGICAL APPROACH TYPIFIED BY DISSONANCE THEORY ARE DISCUSSED. (2 P. REF.)
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. Copyright 2000 Academic Press.
Drawing on an appraisal-tendency framework (J. S. Lerner & D. Keltner, 2000), the authors predicted and found that fear and anger have opposite effects on risk perception. Whereas fearful people expressed pessimistic risk estimates and risk-averse choices, angry people expressed optimistic risk estimates and risk-seeking choices. These opposing patterns emerged for naturally occurring and experimentally induced fear and anger. Moreover, estimates of angry people more closely resembled those of happy people than those of fearful people. Consistent with predictions, appraisal tendencies accounted for these effects: Appraisals of certainty and control moderated and (in the case of control) mediated the emotion effects. As a complement to studies that link affective valence to judgment outcomes, the present studies highlight multiple benefits of studying specific emotions.
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Emotions The handbook of social psychology
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The handbook of social psychology
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Zajonc, R. (1998). Emotions. In D. Gilbert, S. Fiske, & G. Lindzey (Eds.), The handbook of social
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