Sunk Costs Effect: Does Theoretical Knowledge Affects Students’ Decision Process?

Suliani Rover, Artur Filipe Ewald Wuerges, Eduardo Cardelal Tomazzia and José Alonso Borba
Additional contact information
Suliani Rover: University of São Paulo
Artur Filipe Ewald Wuerges: Federal University of Santa Catarina
Eduardo Cardelal Tomazzia: Federal University of Santa Catarina
José Alonso Borba: Federal University of Santa Catarina

Brazilian Business Review, 2009, vol. 6, issue 3, 232-248

Abstract: The sunk cost is defined as a greater disposition to continue an endeavor, once an investment in money, effort or time has been made. According to economic theory, however, these past expenses should not be taken into consideration, as they cannot be recovered. The objective of this study is to investigate if the student from undergraduate courses in the area of business is less susceptible to the sunk costs effect than students from other areas. Five hundred and twenty eight questionnaires were applied on students of nine undergraduate courses of three universities of Santa Catarina. The results confirm the relevance of the cognitive bias caused by sunk costs, as they indicate a lower probability of choosing the right answer when these involve sunk costs in the decisions. The assumption that the students from the business area are less affected by this bias was not confirmed.

Keywords: Sunk costs; decision process, behavioral finance. (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://bbronline.com.br/index.php/bbr/article/download/365/555 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bbz:fcpbbr:v:6:y:2009:i:3:p:232-248

Access Statistics for this article

Brazilian Business Review is currently edited by Emerson Mainardes

More articles in Brazilian Business Review from Fucape Business School Fucape Business School Brazilian Business Review Av. Fernando Ferrari, 1358, Boa Vista CEP 29075-505 Vitória-ES. Contact information at EDIRC.
Bibliographic data for series maintained by Sarah Lasso ( this e-mail address is bad, please contact ).