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

ABSTRACT: 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

SUBMITTER: Dijkstra KA 

PROVIDER: S-EPMC6324799 | biostudies-literature | 2019

REPOSITORIES: biostudies-literature