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The feeling of throwing good money after bad: The role of affective reaction in the sunk-cost fallacy

PloS one, 2019-01, Vol.14 (1), p.e0209900-e0209900 [Peer Reviewed Journal]

COPYRIGHT 2019 Public Library of Science ;COPYRIGHT 2019 Public Library of Science ;2019 Dijkstra, Hong. This is an open access article distributed under the terms of the Creative Commons Attribution License: http://creativecommons.org/licenses/by/4.0/ (the “License”), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Notwithstanding the ProQuest Terms and Conditions, you may use this content in accordance with the terms of the License. ;2019 Dijkstra, Hong 2019 Dijkstra, Hong ;ISSN: 1932-6203 ;EISSN: 1932-6203 ;DOI: 10.1371/journal.pone.0209900 ;PMID: 30620741

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  • Title:
    The feeling of throwing good money after bad: The role of affective reaction in the sunk-cost fallacy
  • Author: Dijkstra, Koen A ; Hong, Ying-Yi
  • Capraro, Valerio
  • Subjects: Adolescent ; Adult ; Aged ; Analysis ; Biology and Life Sciences ; Cognition ; Cognition & reasoning ; Cognitive ability ; Costs ; Decision Making ; Decision theory ; Decisions ; Emotions ; Female ; Human acts ; Human behavior ; Humans ; Integrals ; Investments ; Male ; Mediation ; Medicine and Health Sciences ; Methods ; Middle Aged ; Older people ; Psychological aspects ; Research methodology ; Social psychology ; Social Sciences ; Sunk cost fallacy ; Throwing ; Young adults
  • Is Part Of: PloS one, 2019-01, Vol.14 (1), p.e0209900-e0209900
  • Description: Continuing investing in a failing plan (i.e., the sunk-cost fallacy) is a common error that people are inclined to make when making decisions. It is impossible to get resources back that already have been invested. Hence, economic theory implies that decision makers' decisions should only be guided by future gains and losses. According to the literature, the sunk-cost fallacy is driven by negative affect. Previous studies focused on negative incidental affect. We investigated, in contrast, whether the sunk-cost fallacy is caused by integral affect elicited by the specific decision context. Study 1 demonstrated a positive relationship between affective reaction and the sunk-cost fallacy. Study 2 replicated the finding in Study 1 in a within-subjects design, and demonstrated a full mediation of type of scenario (invest vs. non-invest) on the sunk-cost effect, mediated by integral affective reaction. A mediation using a within-subjects design additionally demonstrated that the effect is mediated by integral emotional responses experienced in relation to each scenario, and not by incidental emotional states that are unrelated to the scenarios. Study 3 replicated findings in the previous studies, and demonstrated that the relation between the sunk-cost fallacy and affect is moderated by justification. Participants who justified their decision were more resistant to the sunk-cost fallacy, and showed less negative affect elicited by the scenarios, than participants who did not justify their decision. Study 4 provided supporting evidence for our hypothesis by hindering conscious deliberation, and promoting reliance on affect, via cognitive load. The results showed that the relation between affect and the sunk-cost fallacy was stronger for participants under high cognitive load, than under low-load. The paper discussed how this research leads to new ways to protect against the sunk-cost fallacy in the discussion.
  • Publisher: United States: Public Library of Science
  • Language: English
  • Identifier: ISSN: 1932-6203
    EISSN: 1932-6203
    DOI: 10.1371/journal.pone.0209900
    PMID: 30620741
  • Source: Open Access: DOAJ Directory of Open Access Journals
    Open Access: PubMed Central
    PLoS (Open access)
    Geneva Foundation Free Medical Journals at publisher websites
    AUTh Library subscriptions: ProQuest Central
    MEDLINE
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