It's no longer “me”: Low past-self-continuity reduces the sunk-cost bias

The Sunk Cost Bias and Managerial Pricing Practices

This paper provides an explanation for why the sunk cost bias persists among firms competing in a differentiated product oligopoly. Firms experiment with cost methodologies that are consistent with real-world accounting practices, including ones that allocate fixed and sunk costs to determine“variable” costs. These firms follow “naive” adaptive learning to adjust prices. Costing methodologies t...

Providing a reinforcement history that reduces the sunk cost effect.

The sunk cost error occurs when individuals persist with a non-optimal course of action because they have already invested time or resources in it. The current study examined the effect of specific experiences on the likelihood of the sunk cost error. Six pigeons were given repeated choices between persisting with and escaping from relatively large fixed ratios. In most conditions escaping was ...

Debiasing the mind through meditation: mindfulness and the sunk-cost bias.

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 re...

Falling prey to the sunk cost bias: a potential harm of patient radiation dose histories.

The Sunk Cost Fallacy in Reverse Auctions

We empirically study buyer behavior in an online outsourcing website where sealed bid auctions are held with bids arriving over time. We focus on when buyers terminate their requests and how they behave when choosing the winning bid. We find that buyers are more likely to choose the last bid; and all other positions (i.e., the first bid, the second bid, until the penultimate bid) are chosen wit...