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This research looks at the relationship between gamer roles, motivations, and their association with problematic gaming. Particularly, attitudes, flow, and sunk cost were explored within EA Sport's FIFA, a popular eSports video game that features loot boxes. Loot boxes are purchases made within video games that yield random in-game items, akin to gambling. eSports are popular video games that have attracted fandom, spectators, and audiences often streamed online. This study conducted an online survey (n = 200) of FIFA gamers. Participants were screened to ensure they played FIFA's Ultimate Teams game mode which features the predominant use of loot boxes. Attitudes and flow predicted problematic gaming. Sunk cost was also found to be highly associated with problematic gaming. Importantly, two emergent gaming roles (manager and trader) were explored and discussed in this study. These roles that gamers adopt within the game are defined by gamer motivations. This provides knowledge regarding the impact of loot boxes and its association with problematic gaming. The findings from this research suggest that the gamer roles of trader and manager in FIFA are dynamic, such that sunk cost is greater for those that lean more toward trading, which is associated with problematic gaming. Additionally, games like FIFA as an eSport may create a sense of normalcy for competitive online games that utilize gambling style mechanics. [ABSTRACT FROM AUTHOR]

This paper examines the outward foreign direct investment events of Chinese manufacturing firms from 2008 to 2022. It explores how sunk cost and performance feedback drive firms' foreign exit strategies based on the behavioral theory of the firm. Additionally, it also examines the contextual factor that may affect the focal relationship. We adopt a panel logistic estimation to test the hypotheses. The conclusions show that firms are more likely to exit overseas markets when faced with sunk costs and negative performance feedback. Conversely, positive performance feedback significantly decreases the probability of firms exiting foreign markets. Additionally, environmental munificence and complexity can weaken the strength of the focal nexus to some extent. These findings hold both theoretical and practical significance for multinational enterprises and the government in the context of the 'dual-circulation strategy'. [ABSTRACT FROM AUTHOR]

Purpose: Showrooming presents a complex and evolving challenge to retail managers, as it signifies the emergence of new forms of exchange rules. The purpose of this research is to investigate how factors responsible for information search and evaluation affect showrooming and also consider the consumer mindset as a moderator. Design/methodology/approach: This research undertakes three experimental designs to investigate how the push (i.e. assortment size), pull (i.e. price discount), and mooring (i.e. sunk cost) factors influence consumers' showrooming intention. Specifically, consumers' maximizing tendency plays the role of moderator. Findings: The results reveal that push, pull, and mooring factors are significantly related to consumers' showrooming intention. Furthermore, the findings show that maximizers have higher showrooming intention than satisficers in the context of the push, pull, and mooring factors. Originality/value: By integrating the push-pull-mooring framework and the maximizing mindset theory, this research proposes a novel research model and the empirical testing results support six hypotheses. The findings add to the body of knowledge in showrooming behavior by taking consumer mindset into account. The results also provide implications for practitioners to develop their retail strategies. [ABSTRACT FROM AUTHOR]

This study examines the impact of individual-level factors on organisations' escalation of commitment (EOC) using self-justification theory and institutional perspective. We use the Cox proportional hazard model on Indian Premier League (IPL) players’ data from 2008 to 2019 to test the proposed hypotheses. We find that player sunk cost (salary paid), reputation, and high status are positively related to the IPL team's EOC (player survival in the same team) for the particular player. Results show that player reputation and high status positively moderate the relationship between player level sunk cost and the IPL team's EOC for the particular player.

Abstract Optimal healthcare provision for the elderly is increasingly possible via real-time health indicators’ data generated by mHealth care applications. Yet, these apps require continuous utilization, which remains problematic. This research examines gamification, usability, as well as empathetic cooperation and social interaction (ESCI) as enablers whereas inertia, sunk cost, transition cost, perceived risk, and technological anxiety are validated as inhibitors of mHealth care applications continued usage intention. Drawing on self-determination theory (SDT) and the Health IT Usability Evaluation Model (Health-ITUEM), the study also validates engagement as an influencer of continued intention. The sample comprised 643 older adults using mHealth care applications and residing in North Indian states. Structural Equation Modelling (SEM) was applied to assess and validate the hypothesized relationships. The results confirmed that usability strongly impacted engagement, followed by gamification and ESCI. Conversely, perceived risk emerged as the strongest inhibitor, followed by sunk cost, technological anxiety, and transition cost. Interestingly, Inertia had a positive and significant impact on engagement. This research is an initial endeavor to understand enablers and inhibitors of mHealth care applications (mHealth care apps) concerning older adults. The model that emerged from this study would provide valuable insights by validating various significant issues to generate engagement of the elderly towards mHealth care apps. [ABSTRACT FROM AUTHOR]

Background: While previous work in higher education documents the impact of high tuition costs of attending graduate school as a key motivator in attrition decisions, in engineering, most graduate students are fully funded on research fellowships, indicating there are different issues causing individuals to consider departure. There has been little work characterizing nonfinancial costs for students in engineering graduate programs and the impact these costs may have on persistence or attrition. Purpose/Hypothesis: Framed through the lens of cost as a component of the expectancy–value theory framework and the graduate attrition decisions (GrAD) model conceptual framework specific to engineering attrition, the purpose of this article is to characterize the costs engineering graduate students associate with attending graduate school and document how costs affect students' decisions to persist or depart. Design/Method: Data were collected through semistructured interviews with 42 engineering graduate students from R1 engineering doctoral programs across the United States who have considered, are currently considering, or have chosen to depart from their engineering PhD programs with a master's degree. Results: In addition to time and money, which are costs previously captured in research, participants identified costs to life balance, costs to well‐being, and identify‐informed opportunity costs framed in terms of what "could have been" if they had chosen to not go to graduate school. As these costs relate to persistence, students primarily identified their expended effort and already‐incurred costs as the primary motivator for persistence, rather than any expected benefits of a graduate degree. Conclusion: The findings of this work expand the cost component of the GrAD model conceptual framework, providing a deeper understanding of the costs that graduate students relate to their persistence in engineering graduate programs. It evidences that motivation to persist may not be due to particularly strong goals but may result from costs already incurred. Through this research, the scholarly community, students, advisors, and university policymakers can better understand the needs of engineering graduate students as they navigate graduate study. [ABSTRACT FROM AUTHOR]

The sunk-cost fallacy is an anomaly in decision-making that has been proven in various experimental studies. However, individual differences in the tendency to fall into sunk-cost fallacy have not been sufficiently reported. This preliminary study contains a psychometric evaluation report of the Resistance to Sunk Costs (RtSC) measurement instrument, a component of the Adult Decision Making Competence instrument (A-DMC; De Bruin, Parker, & Fischhoff, 2007) which is modified into Indonesian socio-cultural and economic contexts. The RtSC instrument uses a situational judgment test model, therefore it is adequate to measure the psychological construct of sunk-cost fallacy. The data analysis techniques used in this study were Item Factor Analysis (IFA) and graded response models. Respondents in this study were 217 students in Indonesia. The analysis results show that the 1-factor model of resistance to sunk costs fits the data. At the item level, based on the IFA, it was found that two out of ten items were found to be misfits. The results of the GRM analysis on the remaining eight items indicate that the items fit the GRM. However, the distinguishing power and reliability were found to be low. It can be concluded that this preliminary study provides a variety of important information as suggestions for improvement for our modified scale. Several theoretical and methodological implications are discussed.

Hungarian A tanulmány célja, hogy ismertesse az elsüllyedt költség döntésekre gyakorolt hatását a viselkedési közgazdaságtan szemléletének alkalmazásával. A cikk nemzetközi szakirodalmi áttekintés alapján rámutat arra, hogy nemcsak a pénzügyi, hanem a viselkedési (idő, erőfeszítés) elsüllyedt költségek is hatnak a döntésekre, hogy milyen okok idézhetik elő és mely tényezők befolyásolhatják az elsüllyedt költség hatást, valamint hogy az milyen elméletek és összefüggések alapján magyarázható. Az írás kitér továbbá az elsüllyedt költségek fogyasztói és vállalati döntésekre gyakorolt hatására, valamint ez utóbbiak piaci szinten megnyilvánuló következményeire. English This paper aims to demonstrate the effect of sunk costs on decisions from a behavioural economic perspective. It demonstrates, based on a literature review, that not only financial, but also behavioural (time, effort) sunk costs influence decisions. It also examines what reasons can lead to and what factors can influence sunk cost effect, and what theories and relationships can explain it. The paper also discusses how sunk costs influence consumer and corporate decisions and what consequences the latter have at the market level.

The textile sector is a significant exporting sector of Pakistan. This study examines the determinants of the export performance of Pakistani textile firms using firm-level panel data from 2008 to 2018. Under the framework of the dynamic System Generalized Method of Moment (SGMM) methodology, our findings suggest that both sunk costs and firm-specific characteristics like productivity, age, and size are important determinants of textile exports. Further, the study also observes that firms with a high number of export destinations and greater product diversification tend to export more. The year-specific dummies reveal that textile export performance is adversely affected by the energy crisis in 2012. We recommend that Pakistan should support large, experienced, and productive textile exporter firms to boost textile exports. Besides, more assistance should be provided regarding potential overseas markets to the existing and new export firms.

Building on three theoretical perspectives, Alchian–Allen theorem, sunk cost fallacy, and mental account theory, this study proposed and tested a model on Chinese outbound travelers' impulse shopping behaviors as determined by sunk cost, information confusion, after-sale risk, and anticipated regret (both downward and upward). Using a sample of 314 Chinese outbound travelers, findings of the study suggested that sunk cost, after-sale risk, and downward anticipated regret significantly influence travelers' impulsive shopping, with downward anticipated regret mediating the relationship between information confusion and impulsive purchase and between sunk cost and impulsive purchase. The study contributes to existing theories and literature for a better understanding of how sunk cost influences outbound travelers' impulsive shopping behavior from three theoretical perspectives, particularly in a Chinese cultural context. The findings of the study also have important implications for destination stakeholders. [ABSTRACT FROM AUTHOR]

Due to the randomness of participants' movement and the selfishness and dishonesty of individuals in crowdsensing, the quality of the sensing data collected by the server platform is uncertain. Therefore, it is necessary to design a reasonable incentive mechanism in crowdsensing to ensure the stability of the sensing data quality. Most of the existing incentive mechanisms for data quality in crowdsensing are based on traditional economics, which believe that the decision of participants to complete a task depends on whether the benefit of the task is greater than the cost of completing the task. However, behavioral economics shows that people will be affected by the cost of investment in the past, resulting in decision-making bias. Therefore, different from the existing incentive mechanism researches, this paper considers the impact of sunk cost on user decision-making. An incentive mechanism based on sunk cost called IMBSC is proposed to motivate participants to improve data quality. The IMBSC mechanism stimulates the sunk cost effect of participants by designing effort sensing reference factor and withhold factor to improve their own data quality. The effectiveness of the IMBSC mechanism is verified from three aspects of platform utility, participant utility and the number of tasks completed through simulation experiments. The simulation results show that compared with the system without IMBSC mechanism, the platform utility is increased by more than 100%, the average utility of participants is increased by about 6%, and the task completion is increased by more than 50%. [ABSTRACT FROM AUTHOR]

Two potentially costly errors are common in sequential investment decisions: sticking too long to a failing course of action (escalation of commitment), and abandoning a successful course of action prematurely. Past research has mostly focused on escalation of commitment, and identified three critical determinants: personal responsibility, preferences for prior decisions, and decision framing. We demonstrate in three studies using an incentivized poker inspired task that these determinants of escalation reliably lead decision makers to keep investing even when real money is on the line. We observed in Experiments 1, 2 and 3 that reinvestments were more likely when decision makers were personally responsible for prior decisions. This likelihood was also increased when the decision makers had indicated a preference for initial investments (Experiments 2 and 3), and when outcomes were framed in terms of losses as compared to gains (Experiment 3). Both types of decision errors - escalation of commitment and prematurely abandoning a course of action - could be traced to the same set of determinants. Being personally responsible for prior decisions, having a preference for the initial investment, and loss framing did increase escalation, whereas lacking personal responsibility, having no preference for the initial investment, and gain framing increased the likelihood of prematurely opting out. Finally, personal responsibility had a negative effect on decision quality, as decision-makers were still more likely to reinvest when they were personally responsible for prior decisions, than when prior decisions were assigned optimally by an algorithm (Experiments 2 and 3). [ABSTRACT FROM AUTHOR]

The sunk cost effect is the tendency for an individual's decision making to be impacted by unrecoverable previous investments of resources. Soman (2001) found that sunk cost effect is weaker for time than for money (Studies 1 and 2) and that the facilitation of money-like accounting strengthens the sunk cost effect for time (Study 5). We conducted a Registered Report of a close, high-powered replication and extension of Soman's (2001) Studies 1 and 2 and a conceptual replication of his Study 5 with an online sample of US American Amazon Mechanical Turk (N = 821). We found support for differences between sunk money costs and sunk time costs in Study 1 (original: Φc = .61 [.43, .78]; replication: Φc = .38 [.31, .45]), yet not in Study 2, in which we found sunk cost effects for both money and time (original: money - Φc = .32 [.12, .52], time - Φc = .02 [.00, .18]; replication: money - Φc = .23 [.14, .33], time - Φc = .32 [.23, .42]). In Study 5, we found no support for facilitation of money-like accounting as strengthening the sunk time cost effect. Materials, data, and code are available on: https://osf.io/pm264/. [ABSTRACT FROM AUTHOR]

Subsidiaries are important in the global strategy of multinational enterprises (MNEs). However, in the face of uncertainty and competition, the decision to divest a subsidiary from a market becomes a critical decision for MNEs. This study suggests that the factors for divesting subsidiaries are related not only to the performance of the subsidiary but also to slack resources and sunk costs. It analysed 254 subsidiaries in Taiwan and found that the better the subsidiary’s performance is, the less it would decide to divest from the market. Additionally, it was found that the subsidiary with slack resources would be a moderating variable with a positive impact. In addition, the presence of sunk costs reinforces the positive effect of slack resources on the relationship between subsidiary performance and the non-divestment of the subsidiary. Overall, this study points to the significance of subsidiary performance on decision-making and explains the influence of slack resources and sunk costs. [ABSTRACT FROM AUTHOR]

A general economic principle is that when evaluating the costs of a decision, sunk costs should not be considered and that the decision-maker should consider only those costs that are incurred as a result of making that decision. However, both anecdotal and empirical evidence has shown that when making decisions, people are influenced by sunk costs, thereby committing the sunk-cost fallacy. A corpus of research has established that this fallacy occurs among different nations and cultures to differing extents or degrees. However, none of the previous research was conducted on Nigerians. This study, therefore, investigates whether Nigerians, too, commit this fallacy and then identifies factors that affect Nigerians' susceptibility to the fallacy. Employing a binary logit model, it was found that about 49 per cent of the respondents to questions based on a decision-making vignette committed the sunk-cost fallacy. The results also showed that locus of cost responsibility (whether the cost was borne by the decision maker or another person on behalf of the decision maker) and ethnicity (whether the decision maker is Yoruba or not) were significant determinants of susceptibility to sunk-cost fallacy. This suggests that in Nigeria sunk-cost fallacy is intrapersonal and more prevalent among the Yorubas than among the Hausas or the Igbos. Therefore, the sunk-cost fallacy is ubiquitous and more likely in personal decisions than decisions made on behalf of others. [ABSTRACT FROM AUTHOR]

A general economic principle is that when evaluating the costs of a decision, sunk costs should not be considered, and the decision-maker should consider only those costs incurred as a result of making that decision. However, anecdotal and empirical evidence has shown that people are influenced by sunk costs when making decisions, thereby committing the sunk-cost fallacy. A corpus of research has established that this fallacy occurs among nations and cultures to differing extents or degrees. None of the earlier studies, however, focused on Nigerians. This study, therefore, investigates whether Nigerians, too, commit this fallacy and then identifies factors that affect Nigerians' susceptibility to the fallacy. Employing a binary logit model showed that about 49 per cent of the respondents to questions based on a decision-making vignette committed the sunk-cost fallacy. The results also showed that locus of cost responsibility (whether the decision maker or another person bore the cost on behalf of the decision maker) and ethnicity (whether the decision maker is Yoruba or not) were significant determinants of susceptibility to sunk-cost fallacy. This suggests that in Nigeria, the sunk-cost fallacy is intrapersonal and more prevalent among Yorubas than among Hausas or Igbos. Therefore, the sunk-cost fallacy is ubiquitous and more likely in personal decisions than decisions made on behalf of others.

The sunk cost effect refers to the fact that human decisions are consistently influenced by previous irrecoverable and irrelevant costs. Recent neuroimaging experiments suggest that the dorsolateral prefrontal cortex (dlPFC) plays a pivotal role in the sunk cost effect yet the causal and neurocomputational role of the dlPFC remains elusive. In this study, two cohorts of healthy human male and female adults were recruited to complete a novel two-step decision-making task during the anodalsham or cathodal-sham high-definition transcranial direct current stimulation (HD-tDCS) over the dlPFC, respectively. Consistent with previous studies, we showed that the sunk cost deterred participants from making further investment and therefore engendered a de-escalation effect. Such behavior can be captured by a weighted mental accounting model with a recalibrated reference point in which the direction and magnitude of the sunk cost effects hinge on the decision weights apportioned to the option values. Interestingly, transcranial stimulation did not influence participants’ initial willingness to incur sunk costs but only altered sunk costs’ downstream effects. Specifically, anodal stimulation over the right dlPFC amplified the de-escalation effect of sunk costs whereas cathodal stimulation yielded the opposite result. HD-tDCS also changed the decision weights of the mental accounting model, providing a causal and computational link between PFC and sunk cost effects. [ABSTRACT FROM AUTHOR]

The present study was designed to extend research by Pattison et al. (2012) and compare performance on behavior-based and hypothetical scenario-based sunk cost procedures. Participants (n = 25) completed behavior-based and hypothetical scenario-based tasks to investigate the effects of manipulating percent of task completed on sunk cost behavior. For the behavior-based task, participants played a video game and chose between continuing to engage an initial monster or switching to attack a new monster that arrived. For the hypothetical scenario-based tasks, participants were given a scenario in which continuing on a present course of action entailed losses or was otherwise non-optimal. They were asked at various points of completion how likely they were to invest the remaining funds in the project. Overall, participants responded optimally on the behavior-based task and engaged in sunk cost behavior for the hypothetical scenario-based tasks. One explanation for the difference between these tasks is that the behavior-based task may have more discriminable consequences; the consequences for the hypothetical tasks were unknown. Results from the present study align with previous studies suggesting that stimulus discriminability is a major determinant of non-optimal persistence on a task. It is possible that many supposed instances of the sunk cost effect are better conceptualized as behavior produced by contingencies in contexts with uncertain or probabilistic outcomes. In sunk cost procedures with human participants, verbal behavior appears to play an important role. [ABSTRACT FROM AUTHOR]

First demonstrated by Staw (1976), escalation of commitment is the tendency for an individual to increase their commitment to a failing course of action when they are personally responsible for the negative consequences. An attempt was made to replicate this finding and test whether individual differences in numeracy and cognitive reflection could help explain such an effect. No evidence for escalation of commitment amongst the participants was found (N = 365). Participants simply invested more in more promising projects. Also, no evidence was found that numeracy or cognitive reflection predict escalation behaviour. The validity of escalation of commitment behaviour is discussed which suggests that future work should look to explore the boundary conditions of such an effect.

The industrial processes have the potential to discharge the pollution to land, air and water. This pollution can cause a health risk to the public as well as damage the environment. In order to prevent this pollution, industrial process are strictly regulated to minimize the pollution and to manage their environmental impacts. Environmental costs are used to monetary values spent for environment to retain the nature. Many of the researchers have defined different types of environmental costs which are considered by the production sectors for promoting environmental sustainability. Successful production run depends on effective inventory management. In those days, the inventory models support the production system, but in these days the inventory models have to be formulated to initiate environmental friendly production structure to prevent the industrial pollution. This paper aims in formulating a new EOQ and EPQ inventory models which encompassing the costs of production and transportation along with the associated costs of mitigating the environmental effects under permissible delay in payment. [ABSTRACT FROM AUTHOR]

The previous research on the role sunk costs play in the National Basketball Association (NBA) has come to mixed conclusions. We use a direct measure of sunk costs, player compensation, and a quasi-experimental method that considers the endogenous relationship between compensation and productivity. Using the spike in salary cap for the 2016–2017 season, from new television broadcasting contracts, we find compensation has a significant effect on playing time. Specifically, we use players signing free agent contracts in 2015–2016 or 2016–2017. For both groups, we analyze the change in salary from the pre-contract season to the post-contract season. Using the difference-in-differences, we find the inflated salary cap, from the new television contracts, increased player compensation by 81.7%, on average. Instrumental variables estimations show the increase in compensation significantly affects playing time. The change in salary yields an additional 1.93 min played per game, which is approximately equal to the effect of a one-standard deviation increase in contemporaneous productivity. Furthermore, we find that our conclusions are robust to the use of various advanced analytical measures or traditional box-score statistics. [ABSTRACT FROM AUTHOR]

To minimize distress associated with choices with uncertain consequences, individuals with high levels of anxiety may continue with familiar choices rather than seek out novel choices. As a result, they might be more vulnerable to sunk cost fallacy, the inability to ignore unrecoverable prior investments when making decisions about the future. Considering that cognitive reappraisal may mitigate the association between anxiety and poor decision making, the present study examined the relations between cognitive reappraisal, anxiety, and resistance to sunk cost. To this end, 108 undergraduates completed questionnaires assessing their tendency to engage in cognitive reappraisal, severity of anxiety, and resistance to sunk cost. Participants' tendency to engage in cognitive reappraisal moderated the relation between the severity of anxiety and resistance to sunk cost. However, in individuals who typically engaged in cognitive reappraisal, only lower levels of anxiety were associated with higher resistance to sunk cost. Individuals with high vs. low levels of anxiety might differ in how they reappraise negative situations, which can consequently affect resistance to sunk cost. [ABSTRACT FROM AUTHOR]

Striatal dopamine (DA) release has long been linked to reward processing, but it remains controversial whether DA release reflects costs or benefits and how these signals vary with motivation. Here, we measure DA release in the nucleus accumbens (NAc) and dorsolateral striatum (DLS) while independently varying costs and benefits and apply behavioral economic principles to determine a mouse's level of motivation. We reveal that DA release in both structures incorporates both reward magnitude and sunk cost. Surprisingly, motivation was inversely correlated with reward-evoked DA release. Furthermore, optogenetically evoked DA release was also heavily dependent on sunk cost. Our results reconcile previous disparate findings by demonstrating that striatal DA release simultaneously encodes cost, benefit, and motivation but in distinct manners over different timescales. Future work will be necessary to determine whether the reduction in phasic DA release in highly motivated animals is due to changes in tonic DA levels. • Striatal dopamine release reflects sunk cost, the cost already paid for reward • Phasic dopamine release is diminished in high-motivation states • Optogenetically evoked dopamine release is highly context dependent Eshel et al. combine economic analyses with dopamine recordings and manipulations to find that dopamine release in the striatum encodes both the magnitude of a reward and how much the mouse has worked for it. Furthermore, the higher the mouse's motivational level, the lower the reward-evoked dopamine release. [ABSTRACT FROM AUTHOR]

Objetivo: O objetivo deste estudo é analisar a influência do efeito sunk cost no processo de tomada de decisão dos estudantes de graduação em Administração e Ciências Contábeis da Universidade Federal do Rio Grande do Norte. Metodologia: A amostra do estudo compreende 655 estudantes, sendo 347 do curso de Ciências Contábeis e 308 do curso de Administração. O levantamento de dados foi realizado por meio da aplicação de questionários estruturados elaborados com base nos estudos de Arkes e Blumer (1985), Rover, Wuerges, Tomazzia e Borba (2009) e Silva e Domingos (2010). Após tabulados, os dados foram analisados por meio da estatística descritiva, bem como foi realizado o teste U de Mann-Whitney para verificar se existem diferenças entre as respostas dos acadêmicos de Ciências Contábeis e Administração. Resultados: Os principais resultados sugerem que o montante de custo perdido pode influenciar na ocorrência do efeito sunk cost, sendo esta evidência percebida por meio dos valores das médias, tendo em vista que a redução do montante do custo perdido é inversamente proporcional à disposição média dos respondentes em continuar investindo no curso de ação. Além de identificar que os sunk costs são levados em consideração no processo de tomada de decisão por parte dos discentes investigados, verifica-se que não há diferença estatisticamente significante entre as medianas dos respondentes no que tange às questões que permitem identificar a suscetibilidade ao efeito custo irrecuperável no contexto de decisão empresarial. Contribuições do Estudo: O estudo contribui ao sinalizar que os futuros profissionais de Administração e Contabilidade são suscetíveis ao efeito sunk cost, o que pode implicar em um report de informações contábeis viesadas por parte dos futuros contadores, bem como tomadas de decisões viesadas por futuros administradores. Adicionalmente, contrapõe evidências anteriores que sugerem que os agentes de diferentes áreas de conhecimento reagem de forma diferente à presença de custos irrecuperáveis.

Yarışılabilir Piyasalar teorisi, bir piyasada az sayıda ve büyük hacimli firmaların piyasa etkinliği açısından dezavantaj oluşturmayabileceğini ileri sürmektedir. Yoğunlaşma ve ölçek ekonomilerini tekelci gücün kaynağı olarak gören geleneksel yaklaşımların aksine, Yarışılabilir Piyasalar teorisi bu faktörleri etkin piyasalar için bir engel olarak görmemiştir. Teori kapsamında piyasaya giriş ve çıkışların tamamen serbest olması yüksek endüstri verimi için yeterli görülmektedir. 1980’li yılların başında geliştirilen teori kapsamında bir çok piyasa türü için ampirik ve teorik çalışma yapılmıştır. Bu çalışmada, Yarışılabilir Piyasalar Modelinin teorik altyapısı anlatılmış ve Dünya denizyolu taşımacılığı piyasası, potansiyel rekabet ve batık maliyet açısından incelenmiştir. Yapılan ampirik çalışmalar sonucunda piyasanın Yarışılabilir Piyasalar modelinin temel özelliklerini taşıdığı sonucuna varılmıştır.

Sunk costs have been known to elicit violations of expected utility theory, in particular, the independence or cancellation axiom. Separately, violations of the stochastic dominance principle have been demonstrated in various settings despite the fact that descriptive models of choice favored in economics deem such violations irrational. However, it is currently unknown whether sunk costs also yield stochastic dominance violations. In two studies using a tri-colored roulette wheel choice task with non-equiprobable events yet equal payoffs, we observed that those who had sunk costs selected a stochastically dominated option significantly more than did those who had no costs. Moreover, a second study revealed that people chose a stochastically dominated option significantly more when the expected value was low compared to high. A model comparison of psychological explanations demonstrated that theories that incorporate a reference shift of the status quo could predict these sunk cost-based violations of stochastic dominance whereas other models could not.

Purpose: identify whether the sunk cost effect is one of the reasons that make banana producers in Espírito Santo, a Brazilian state, make decisions that involve returning home with unsold production. Methodology/Approach: It is an exploratory and descriptive study of multiple cases. The object of study was 17 banana producers from Espírito Santo, who sell their products in Supply Centers of Espírito Santo (CEASA). Data collection was carried out through interviews Findings: The results found demonstrate that producers are reluctant to sell below cost price, noting that there is an influence of sunk costs in their decisions. Another finding is that the fear of loss, which is one of the pillars of the Prospect Theory, also influences the decisions of producers, in the sense of trying to avoid future losses Research Limitation: the methodology used does not allow inferences about the behavior of all producers. Originality/Value of paper: This study confirms that knowledge of costs in the decision-making process is fundamental in any business, since if producers were not influenced by the sunk cost effect, they would probably have better results in this activity.

When a company acquires new knowledge, it expects to create new business by fusing the new knowledge with existing knowledge. At least that is how things appear superficially. However, Fujitsu’s new business development discussed in this paper was not related to any new knowledge but sprung up because of other reasons. Because the company had invested a lot of resources to acquire new knowledge, it was impossible to recover the management resources that it had invested, which then became sunk costs, unless the company did something. We call such a situation “sunk cost pressure.” In the case examined in this paper, this sunk cost pressure induced the combining of disparate knowledge in the company’s possession, thus creating new business.

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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]

The increasing uptake of electric vehicles, and the established practice of long-term parking at stations and airports, offers an opportunity to develop a flexible approach to help with the energy storage dilemma. This paper investigates the feasibility of using a number of EV batteries as an energy storage and grid balancing solution within the UK Central Hub area. Here, the capital cost of the vehicle is a sunk cost to the EV owner. The potential income generated, or discount on long-term parking, is an additional benefit of ownership. This paper considers the income available to a small and large size car park from the different market mechanisms to offer grid support in the UK and contrasts this with the complexity and costs of the EV charging infrastructure required within these types of scheme. [ABSTRACT FROM AUTHOR]

Software project escalation is a costly problem that leads to significant financial losses. Prior research suggests that setting a publicly announced limit on resources can make individuals less willing to escalate their commitment to a failing course of action. However, the relationship between initial budget and schedule goals and software project escalation remains unexplored. Drawing on goal setting theory as well as sunk cost and mental budgeting perspectives, we explore the effect of goal difficulty and goal specificity on software project escalation. The findings from a laboratory experiment with 349 information technology professionals suggest that both very difficult and very specific goals for budget and schedule can limit software project escalation. Further, the level of commitment to a budget and schedule goal directly affects software project escalation and also interacts with goal difficulty and goal specificity to affect software project escalation. This study makes a theoretical contribution to the existing body of knowledge on software project management by establishing a connection between goal setting theory and software project escalation. The study also contributes to practice by highlighting the potential negative consequences that can result from the nature of initial budget and schedule goals that are established at the outset of a project. [ABSTRACT FROM AUTHOR]

Although neoclassical economic theory predicts that fixed cost magnitude and fixed cost reporting format will not influence short-term pricing decisions, these factors systematically affected pricing decisions in a duopoly experiment. Increasing fixed cost magnitude (a pure sunk cost in this study) across experimental conditions caused participants to first lower, then raise, competitive prices. Consistent with the psychological phenomenon of loss aversion, this change in pricing behavior reduced the frequency of reported losses. This study further reveals that the accounting format for reporting fixed costs influenced pricing behavior. Specifically, participants receiving capacity costing feedback reports established increasingly lower selling prices relative to the prices established by participants receiving contribution margin feedback reports. Given that a very simple cosmetic reporting manipulation produced increasingly significant competitive pricing differences in a market setting, this study provides evidence that functional fixation is not necessarily eliminated by market forces. [ABSTRACT FROM AUTHOR]

The increasing uptake of electric vehicles, and the established practice of long-term parking at stations and airports, offers an opportunity to develop a flexible approach to help with the energy storage dilemma. This paper investigates the feasibility of using a number of EV batteries as an energy storage and grid balancing solution within the UK Central Hub area. Here, the capital cost of the vehicle is a sunk cost to the EV owner. The potential income generated, or discount on long-term parking, is an additional benefit of ownership. This paper considers the income available to a small and large size car park from the different market mechanisms to offer grid support in the UK and contrasts this with the complexity and costs of the EV charging infrastructure required within these types of scheme.

Purpose: The objective of this paper was to analyze the influence of the sunk cost effect in the decision-making process of Accounting and Business Administration undergraduate students of the Federal University of Rio Grande do Norte. Methodology: The sample comprised 655 students, of which 347 were from the Accounting program and 308 from a Business Administration program. Data were collected through the application of structured questionnaires, based on the studies of Arkes and Blumer (1985), Rover, Wuerges, Tomazzia and Borba (2009) and Silva and Domingos (2010). After tabulation, the data were analyzed through descriptive statistics, as well as a Mann-Whitney U test to verify if there are differences between the answers of the Accounting and Business Administration students. Results: The main results suggest that the amount of sunk cost can influence the occurrence of the sunk cost effect, and this evidence is perceived through the mean values, considering that the reduction of the amount of sunk cost is inversely proportional to the average disposition of the respondents in continue investing in the course of action. In addition, to identify that the investigated students take the sunk costs into consideration in the decision-making process, it is verified that there is no statistically significant difference between the medians of the respondents with regard to the questions that allow identifying the susceptibility to the sunk cost effect in the context of business decision-making. Contributions of the Study: The study contributes to signal that the future professionals of Administration and Accounting are susceptible to the sunk cost effect, which can imply in a report of biased accounting information by future accountants, as well as biased decisions by future administrators. Furthermore, these results contrast previous evidence that suggests that agents from different areas of knowledge react differently to the presence of sunk costs. [ABSTRACT FROM AUTHOR]

Purpose: The objective of this paper was to analyze the influence of the sunk cost effect in the decision-making process of Accounting and Business Administration undergraduate students of the Federal University of Rio Grande do Norte. Methodology: The sample comprised 655 students, of which 347 were from the Accounting program and 308 from a Business Administration program. Data were collected through the application of structured questionnaires, based on the studies of Arkes and Blumer (1985), Rover, Wuerges, Tomazzia and Borba (2009) and Silva and Domingos (2010). After tabulation, the data were analyzed through descriptive statistics, as well as a Mann-Whitney U test to verify if there are differences between the answers of the Accounting and Business Administration students. Results: The main results suggest that the amount of sunk cost can influence the occurrence of the sunk cost effect, and this evidence is perceived through the mean values, considering that the reduction of the amount of sunk cost is inversely proportional to the average disposition of the respondents in continue investing in the course of action. In addition, to identify that the investigated students take the sunk costs into consideration in the decision-making process, it is verified that there is no statistically significant difference between the medians of the respondents with regard to the questions that allow identifying the susceptibility to the sunk cost effect in the context of business decision-making. Contributions of the Study: The study contributes to signal that the future professionals of Administration and Accounting are susceptible to the sunk cost effect, which can imply in a report of biased accounting information by future accountants, as well as biased decisions by future administrators. Furthermore, these results contrast previous evidence that suggests that agents from different areas of knowledge react differently to the presence of sunk costs. [ABSTRACT FROM AUTHOR]

Building prototypes is an essential element in conceptual design. We argue that using resources to build prototypes may induce adherence to the chosen concept and prevents further exploration into other concepts. This phenomenon has previously been attributed to sunk cost caused by building prototypes. In a controlled human subject experimental study in a robot development context we investigate the influence of building and testing prototypes by allowing one group of participants to test their prototypes frequently while the other group is not allowed to test and can only rely on the provided information about the hardware. We report about participants prematurely committing to concept choices and adhering to those after building and testing prototypes while non-testing participants make superior concept choices based on the provided information. While planning may be feasible in some projects with low uncertainty, problems that are more complex require prototyping for knowledge acquisition. We give suggestions on how to reduce the costs of prototyping and the associated effect it has on design fixation. These suggestions are very similar to the test driven development approach known from software development. They include the definition of critical functions and the respective tests before building the prototypes. When designing the prototypes the focus lies on making a conscious choice of how to prototype with the lowest fidelity necessary to comply with the previously defined test and attempting risky development stages early with the intention of maximizing the work not done. [ABSTRACT FROM AUTHOR]