Searching for the Sunk Cost Fallacy

Daniel Friedman, Kai Pommerenke, Rajan Lukose, Garret Milam and Bernardo A. Huberman
Additional contact information
Kai Pommerenke: UC Santa Cruz
Rajan Lukose: HP Labs
Garret Milam: UC Santa Cruz
Bernardo A. Huberman: HP Labs

Experimental from University Library of Munich, Germany

Abstract: We seek to isolate in the laboratory factors that encourage and discourage the sunk cost fallacy. Subjects play a computer game in which they decide whether to keep digging for treasure on an island or to sink a cost (which will turn out to be either high or low) to move to another island. The research hypothesis is that subjects will stay longer on islands that were more costly to find. Nine treatment variables are considered, e.g. alternative visual displays, whether the treasure value of an island is shown on arrival or discovered by trial and error, and alternative parameters for sunk costs. The data reveal a surprisingly small and erratic sunk cost effect that is generally insensitive to the proposed psychological drivers.

Keywords: sunk; cost; fallacy (search for similar items in EconPapers)
JEL-codes: C9 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2004-07-29
New Economics Papers: this item is included in nep-cbe and nep-exp
Note: Type of Document - pdf; pages: 30
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/exp/papers/0407/0407007.pdf (application/pdf)

Related works:
Journal Article: Searching for the sunk cost fallacy (2007)
Working Paper: Searching for the Sunk Cost Fallacy (2004)
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:wpa:wuwpex:0407007

Access Statistics for this paper

More papers in Experimental from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).