The Library
Evaluating the sunk cost effect
Tools
Tools
Tools
Ronayne, David, Sgroi, Daniel and Tuckwell, Anthony (2021) Evaluating the sunk cost effect. Journal of Economic Behavior and Organization, 186 . pp. 318-327. doi:10.1016/j.jebo.2021.03.029 ISSN 0167-2681.
|
PDF
WRAP-evaluating-the-sunk-cost-effect-Sgroi-2021.pdf - Accepted Version - Requires a PDF viewer. Available under License Creative Commons Attribution Non-commercial No Derivatives 4.0. Download (20Mb) | Preview |
Official URL: https://doi.org/10.1016/j.jebo.2021.03.029
Abstract
We provide experimental evidence of behavior consistent with the sunk cost effect. Subjects who earned a lottery via a real-effort task were given an opportunity to switch to a dominant lottery; 23% chose to stick with their dominated lottery. The endowment effect accounts for roughly only one third of the effect. Subjects’ capacity for cognitive reflection is a significant determinant of sunk cost behavior. We also find stocks of knowledge or experience (crystallized intelligence) predict sunk cost behavior, rather than algorithmic thinking (fluid intelligence) or the personality trait of openness. We construct and validate a scale, the “SCE-8”, which encompasses many resources individuals can spend, and offers researchers an efficient way to measure susceptibility to the sunk cost effect.
| Item Type: | Journal Article | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HD Industries. Land use. Labor | ||||||||
| Divisions: | Faculty of Social Sciences > Economics | ||||||||
| Library of Congress Subject Headings (LCSH): | Sunk costs -- Econometric models, Game theory, Motivation (Psychology) -- Econometric models | ||||||||
| Journal or Publication Title: | Journal of Economic Behavior and Organization | ||||||||
| Publisher: | Elsevier Science BV | ||||||||
| ISSN: | 0167-2681 | ||||||||
| Official Date: | June 2021 | ||||||||
| Dates: |
|
||||||||
| Volume: | 186 | ||||||||
| Page Range: | pp. 318-327 | ||||||||
| DOI: | 10.1016/j.jebo.2021.03.029 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Access rights to Published version: | Restricted or Subscription Access | ||||||||
| Date of first compliant deposit: | 24 March 2021 | ||||||||
| Date of first compliant Open Access: | 28 October 2022 | ||||||||
| RIOXX Funder/Project Grant: |
|
||||||||
| Is Part Of: | 1 | ||||||||
| Related URLs: |
Request changes or add full text files to a record
Repository staff actions (login required)
 |
View Item |
Downloads
Downloads per month over past year
