Can't Stop on a Dime

Abstract

Two laboratory experiments are described that explore the roles of matching and behavioral momentum in persistence of commitment. These experiments were conducted using a variation of the A & S Decision Case in which business students played the role of a financial manager making repeated allocation decisions. In Experiment 1, subjects who initially received intermittent large positive outcomes for their allocations to research and development invested more than those who had received intermittent small positive outcomes. These differences were found both when the intermittent positive outcomes occurred (training), and later, during continuous negative outcomes (extinction). In Experiment 2, subjects were provided with two investment alternatives. They allocated significantly more, both during training and extinction, to the investment alternative that had provided more frequently occurring positive outcomes during training. In addition, allocations were higher during extinction for subjects receiving outcomes with varying magnitudes.

Key Words:

• Choice
• decision making
• investment decision simulation
• matching law
• behavioral momentum
• persistance of commitment
• reward magnitude
• reward rate
• extinction
• student participants
• experiment