A Revisit to Sunk Cost Fallacy for Two-Stage Stochastic Binary Decision Making
Xuecheng Tian,
Bo Jiang,
King-Wah Pang
et al.
Abstract:This paper undertakes a revisit of the sunk cost fallacy, which refers to the tendency of people to persist investing resources into something, even if it is destined to have no good outcome. We emphasize that the utilities associated with different alternatives are not static for decision makers, which is exactly opposite to the traditional perspective. This paper argues that the utility of an option may change due to the choice of another option, suggesting that decisions considered irrational by the traditi… Show more
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