The psychology of sunk cost: A classroom experiment

References

• Arkes, H. R. 1991. Costs and benefits of judgment errors: Implications for debiasing. Psychological Bulletin 110 (3): 486–98. doi: 10.1037/0033-2909.110.3.486.
   Web of Science ®Google Scholar
• Arkes, H. R., and C. Blumer. 1985. The psychology of sunk cost. Organizational Behavior and Human Decision Processes 35 (1): 124–40. doi: 10.1016/0749-5978(85)90049-4.
   Web of Science ®Google Scholar
• Arkes, H. R., and L. Hutzel. 2000. The role of probability of success estimates in the sunk cost effect. Journal of Behavioral Decision Making 13 (3): 295–306. doi: 10.1002/1099-0771(200007/09)13:3<295::AID-BDM353>3.0.CO;2-6.
   Web of Science ®Google Scholar
• Brody, R. G., and K. E. Frank. 1999. Don't throw good money after bad. Commercial Lending Review 14 (3): 72–75.
   Google Scholar
• Bruine de Bruin, W., A. M. Parker, and B. Fischhoff. 2007. Individual differences in adult decision-making competence. Journal of Personality and Social Psychology 92 (5): 938–56. doi: 10.1037/0022-3514.92.5.938.
   PubMed Web of Science ®Google Scholar
• Conlon, D. E., and H. Garland. 1993. The role of project completion information in resource allocation decisions. Academy of Management Journal 36 (2): 402–13. doi: 10.2307/256529.
   Web of Science ®Google Scholar
• Denison, C. A. 2009. Real options and escalation of commitment: A behavioral analysis of capital investment decisions. The Accounting Review 84 (1): 133–55. doi: 10.2308/accr.2009.84.1.133.
   Web of Science ®Google Scholar
• Dick, A. S., and K. R. Lord. 1998. The impact of membership fees on consumer attitude and choice. Psychology and Marketing 15 (1): 41–58. doi: 10.1002/(SICI)1520-6793(199801)15:1<41::AID-MAR4>3.0.CO;2-N.
   Web of Science ®Google Scholar
• Dickie, M. 2006. Do classroom experiments increase learning in introductory microeconomics? Journal of Economic Education 37 (3): 267–88. doi: 10.3200/JECE.37.3.267-288.
   Web of Science ®Google Scholar
• Drummond, H. 1996. The politics of risk: Trials and tribulations of the Taurus project. Journal of Information Technology 11 (4): 347–57. doi: 10.1177/026839629601100408.
   Web of Science ®Google Scholar
• Emerson, T. L. N., and L. K. English. 2016. Classroom experiments: Teaching specific topics or promoting the economic way of thinking? Journal of Economic Education 47 (4): 288–99. doi: 10.1080/00220485.2016.1213684.
   Web of Science ®Google Scholar
• Fay, R. G., and N. R. Montague. 2015. Witnessing your own cognitive bias: A compendium of classroom exercises. Issues in Accounting Education 30 (1): 13–34. doi: 10.2308/iace-50919.
   Web of Science ®Google Scholar
• Ghosh, D. 1997. De-escalation strategies: Some experimental evidence. Behavioral Research in Accounting 9: 88–112.
   Google Scholar
• Gino, F. 2008. Do we listen to advice just because we paid for it? The impact of advice cost on its use. Organizational Behavior and Human Decision Processes 107 (2): 234–45. doi: 10.1016/j.obhdp.2008.03.001.
   Web of Science ®Google Scholar
• Ho, T.-H., I. P. L. Png, and S. Reza. 2018. Sunk cost fallacy in driving the world’s costliest cars. Management Science 64 (4): 1761–78. doi: 10.1287/mnsc.2016.2651.
   Web of Science ®Google Scholar
• Jang, D., A. S. Mattila, and B. Bai. 2007. Restaurant membership fee and customer choice: The effects of sunk cost and feelings of regret. International Journal of Hospitality Management 26 (3): 687–97. doi: 10.1016/j.ijhm.2006.06.001.
   Google Scholar
• Just, D. R., and B. Wansink. 2011. The flat-rate pricing paradox: Conflicting effects of “all-you-can-eat” buffet pricing. Review of Economics and Statistics 93 (1): 193–200. doi: 10.1162/REST_a_00057.
   Web of Science ®Google Scholar
• Knapp, M. C., and C. A. Knapp. 2012. Cognitive biases in audit engagements. The CPA Journal 82 (6): 40–45.
   Google Scholar
• Magalhães, P., and K. G. White. 2016. The sunk cost effect across species: A review of persistence in a course of action due to prior investment. Journal of the Experimental Analysis of Behavior 105 (3): 339–61. doi: 10.1002/jeab.202.
   PubMed Web of Science ®Google Scholar
• Mahlendorf, M. D. 2015. Allowance for failure: Reducing dysfunctional behavior by innovating accountability practices. Journal of Management & Governance 19 (3): 655–86. doi: 10.1007/s10997-013-9276-3.
   Web of Science ®Google Scholar
• McCarthy, A. M., F. D. Schoorman, and A. C. Cooper. 1993. Reinvestment decisions by entrepreneurs: Rational decision-making or escalation of commitment? Journal of Business Venturing 8 (1): 9–24. doi: 10.1016/0883-9026(93)90008-S.
   Web of Science ®Google Scholar
• McNamara, G., H. Moon, and P. Bromiley. 2002. Banking on commitment: Intended and unintended consequences of an organization's attempt to attenuate escalation of commitment. Academy of Management Journal 45 (2): 443–52. doi: 10.2307/3069358.
   Web of Science ®Google Scholar
• Montealegre, R., and M. Keil. 2000. De-escalating information technology projects: Lessons from the Denver International Airport. MIS Quarterly 24 (3): 417–47. doi: 10.2307/3250968.
   Web of Science ®Google Scholar
• Moon, H. 2001. Looking forward and looking back: Integrating completion and sunk-cost effects within an escalation-of-commitment progress decision. Journal of Applied Psychology 86 (1): 104–13.
   PubMed Web of Science ®Google Scholar
• Nathanson, S., J. Brockner, D. Brenner, C. Samuelson, M. Countryman, M. Lloyd, and J. Z. Rubin. 1982. Toward the reduction of entrapment. Journal of Applied Social Psychology 12 (3): 193–208. doi: 10.1111/j.1559-1816.1982.tb00859.x.
   Web of Science ®Google Scholar
• Northcraft, G. B., and M. A. Neale. 1986. Opportunity costs and the framing of resource allocation decisions. Organizational Behavior and Human Decision Processes 37 (3): 348–56. doi: 10.1016/0749-5978(86)90034-8.
   Web of Science ®Google Scholar
• Ratnadiwakara, D., and V. Yerramilli. 2017. Sunk-cost fallacy and seller behavior in the housing market. Rochester, NY: SSRN: https://ssrn.com/abstract=3040712.
   Google Scholar
• Robalo, P., and R. Sayag. 2018. Paying is believing: The effect of costly information on Bayesian updating. Journal of Economic Behavior & Organization 156:114–25. doi: 10.1016/j.jebo.2018.09.016.
   Web of Science ®Google Scholar
• Ross, J., and B. M. Staw. 1986. Expo 86: An escalation prototype. Administrative Science Quarterly 31 (2): 274–97. doi: 10.2307/2392791.
   Web of Science ®Google Scholar
• Ross, J., and B. M. Staw. 1993. Organizational escalation and exit: Lessons from the Shoreham Nuclear Power Plant. Academy of Management Journal 36 (4): 701–32.
   Web of Science ®Google Scholar
• Roth, S., T. Robbert, and L. Straus. 2015. On the sunk-cost effect in economic decision-making: A meta-analytic review. Business Research 8 (1): 99–138. doi: 10.1007/s40685-014-0014-8.
   Google Scholar
• Simonson, I., and B. M. Staw. 1992. Deescalation strategies: A comparison of techniques for reducing commitment to losing courses of action. Journal of Applied Psychology 77 (4): 419–26. doi: 10.1037/0021-9010.77.4.419.
   Web of Science ®Google Scholar
• Sleesman, D. J., D. E. Conlon, G. McNamara, and J. E. Miles. 2012. Cleaning up the Big Muddy: A meta-analytic review of the determinants of escalation of commitment. Academy of Management Journal 55 (3): 541–62. doi: 10.5465/amj.2010.0696.
   Web of Science ®Google Scholar
• Soman, D., and J. T. Gourville. 1998. Payment depreciation: The behavioral effects of temporally separating payments from consumption. Journal of Consumer Research 25 (2): 160–74. doi: 10.1086/209533.
   Web of Science ®Google Scholar
• Staw, B. M. 1997. The escalation of commitment: An update and appraisal. In Organizational decision making, ed. Z. Shapira, 191–215. New York, NY: Cambridge University Press.
   Google Scholar
• Staw, B. M., S. G. Barsade, and K. W. Koput. 1997. Escalation at the credit window: A longitudinal study of bank executives’ recognition and write-off of problem loans. Journal of Applied Psychology 82 (1): 130–42. doi: 10.1037/0021-9010.82.1.130.
   Web of Science ®Google Scholar
• Tan, H.-T., and J. F. Yates. 1995. Sunk cost effects: The influences of instruction and future return estimates. Organizational Behavior and Human Decision Processes 63 (3): 311–19. doi: 10.1006/obhd.1995.1082.
   Web of Science ®Google Scholar
• Thaler, R. 1980. Toward a positive theory of consumer choice. Journal of Economic Behavior & Organization 1 (1): 39–60. doi: 10.1016/0167-2681(80)90051-7.
   Web of Science ®Google Scholar
• Victoravich, L. M. 2010. When do opportunity costs count? The impact of vagueness, project completion stage, and management accounting experience. Behavioral Research in Accounting 22 (1): 85–108. doi: 10.2308/bria.2010.22.1.85.
   Google Scholar
• Wang, X. H., and B. Z. Yang. 2001. Fixed and sunk costs revisited. Journal of Economic Education 32 (2): 178–85. doi: 10.1080/00220480109595183.
   Web of Science ®Google Scholar
• Wang, X. H., and B. Z. Yang. 2004. On the treatment of fixed and sunk costs in principles textbooks: A comment and a reply. Journal of Economic Education 35 (4): 365–69.
   Web of Science ®Google Scholar