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A cognitive bias known as the sunk cost effect has been found across a number of contexts. This bias drives the continued investment of time, effort, or money into an endeavor on the basis of prior investments into it. In Studies 1 and 2, we attempted to observe whether this effect occurs for short-term behavioral investments. In both studies, a reverse, or no sunk cost effect was found. In Study 3, we attempted to find an effect using hypothetical scenarios that were analagous to the behavioral investments presented in Study 1. This also failed to reveal an effect. Finally, Study 4 was an attempt to replicate a previously used hypothetical investment scenario; with results this time revealing the effect. A number of explanations for this pattern of results, such as participation and salient physical exertion, are discussed, with the possibility that some short-term behavioral investments are not subject to the sunk cost effect. [ABSTRACT FROM AUTHOR]

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Copyright of Revista Ambiente Contábil is the property of Revista Ambiente Contabil and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Organizations, and the groups and individuals within them, sometimes face the thorny dilemma of whether or not to continue failing courses of action. Escalation of commitment describes the tendency to "carry on" with such questionable endeavors, regardless of whether doing so is likely to result in success. Despite the wide variability between and within organizations, early research on escalation of commitment largely ignored the role of context. Since then, an impressive volume of studies on the context of escalation has accumulated, and we present a fresh take on the literature by reviewing and analyzing this work. Using a multilevel framework, we elucidate how escalation is influenced by factors at the group and organizational levels, as well as by factors external to the organization. Ultimately, we aim to provide a more comprehensive and nuanced understanding of escalation to stimulate new avenues of research and offer insights into how decision-makers can respond more effectively to escalation dilemmas. [ABSTRACT FROM AUTHOR]

Reasoning and decision-making are fraught with systematic errors in thinking. One key example is sunk cost, a past investment that cannot be recovered, that influences ongoing decisions. A sunk cost bias occurs when previous choices affect present decisions. Sunk cost decision-making has been primarily studied in Western, individualistic cultures although some attention has been focused on comparing its prevalence in collectivist cultures such as Japan and China. We evaluated the influence of individualist and collectivist cultures, perceived control and the role of self. In Study 1 Americans and Indians were primed with cultural values and then presented with sunk cost decision scenarios. Results indicated Americans made more sunk cost decision errors than Indians and personal decisions were associated with more bias than decisions made on behalf of others. Cultural differences on sunk cost bias were consistent with self-justification theory. In Study 2 a new set of sunk cost scenarios varied environmental use and sustainability themes. Results indicated particular situations influenced error, although country of origin and perceived behavioral control were also effective at predicting sunk cost bias. [ABSTRACT FROM AUTHOR]

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 19.92 years 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. [ABSTRACT FROM AUTHOR]

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 19.58 years 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. [ABSTRACT FROM AUTHOR]

We explored the potential for a sunk-cost effect in the realm of time. Questionnaire studies (Experiments 1–4) obtained a sunk-time effect that was robust to manipulations of prospective value, individual versus group consequences, and the effort or enjoyment inherent in the time. Behavioral experiments (Experiments 5–7) also suggested a sunk-time effect and found support for a personal responsibility by sunk-cost interaction on choice behavior. We discuss theoretical implications and a potential connection to animal sunk-cost phenomena. Copyright © 2008 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]