Are Older Adults Less Subject to the Sunk-Cost Fallacy Than Younger Adults?

Strough, JoNell; Mehta, Clare M.; McFall, Joseph P.; Schuller, Kelly L.

doi:10.1111/j.1467-9280.2008.02138.x

Cited by 119 publications

(152 citation statements)

References 18 publications

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“…Effect sizes decrease with age by b = -0.339 (p \ 0.05). In line with previous findings of Strough et al (2008), our analysis thereby supports the idea that older adults are less subject to the sunk-cost fallacy than younger adults. Yet, we find no significant effects for the remaining covariates.…”

Section: Analysis Of Investigated Moderatorssupporting

confidence: 81%

“…Yet decision-makers sometimes deviate from this basic principle of microeconomic theory and take sunk costs into account. The resulting sunk-cost effect has been examined in a variety of disciplines, including psychology (e.g., Astebro et al 2007;Strough et al 2008), sociology (e.g., Janssen et al 2003), management (e.g., Conlon and Garland 1993;Keil et al 2000), marketing (e.g., Soman and Cheema 2001;Soman and Gourville 2001), industrial economics (e.g., Manez et al 2009), and finance (e.g., Guler 2007). As such, the situations in which the sunk-cost effect is observed are also substantially different.…”

Section: Introductionmentioning

confidence: 99%

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On the sunk-cost effect in economic decision-making: a meta-analytic review

Roth

Robbert

Straus

2014

Bus Res

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Although the effect of monetary sunk costs on decision-making is widely discussed, research is still fragmented, and results are sometimes controversial. One reason for this incomplete picture is the missing differentiation between the effect of sunk costs on utilization and progress decisions and its respective moderators. This article presents the results of a meta-analytic review of 98 effect sizes of the sunk-cost effect, with special emphasis on the decision-specific influence of moderators. The results show clear evidence that the sunk-cost effect emerges, though its effect size and the influence of the moderators are contingent on the respective decision type. In particular, we find support for the idea that the sunkcost effect is attenuated by time in utilization decisions. The results also reveal that older adults are less likely to fall prey to the sunk-cost effect than younger adults.

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Section: Analysis Of Investigated Moderatorssupporting

confidence: 81%

Section: Introductionmentioning

confidence: 99%

On the sunk-cost effect in economic decision-making: a meta-analytic review

Roth

Robbert

Straus

2014

Bus Res

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“…Given that the Betula dataset currently does not include direct measures of task-specific knowledge, performance in semantic memory tests will be used as a proxy. 3 Previous studies also observed a positive correlation between age and the capacity to resist sunk costs Strough, Mehta, McFall & Schuller, 2008), explaining this finding with older adults' greater tendency to avoid focusing on painful unrecoverable past costs in the attempt of maintaining a positive emotional state (Strough et al, 2008;Strough, Karns et al, 2011;Strough, Schlosnagle & DiDonato, 2011). In line with previous studies, a positive correlation between age and Resistance to Sunk Costs is expected.…”

Section: A Study On the Memory-decision Making Relationship: Aims Andsupporting

confidence: 79%

“…Additionally, the ability to resist sunk costs is not only related to semantic memory, but also positively associated with age. Previous studies explained this positive relation by referring to older adults' reduced tendency to focus on painful unrecoverable past costs, due to their increased desire to maintain a positive emotional state (Strough et al, 2008;Strough, Karns et al, 2011;.…”

Section: Discussionmentioning

confidence: 99%

“…This shows that if the effects of age-related declines on memory processes are teased out, a positive role of age emerges in some DMC tasks (see also Peters et al, 2007). Finally, other decision-making tasks were not affected by age (Consistency in Risk Perception) or a positive role of age on performance was observed (Resistance to Sunk Costs), even after controlling for the influence of semantic memory (see also Strough et al, 2008). Taken overall, the present findings extend previous investigations on the relation between age and decision making, strengthening our conclusions on the multifold relationship between memory and decision making and providing further evidence of how decision-making competence depends on multiple abilities, which can be differentially affected by age Mather, 2006;Peters et al, 2007;Strough, Karns et al, 2011).…”

Section: Discussionmentioning

confidence: 99%

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The Multifold Relationship Between Memory and Decision Making: An individual-differences study

Missier¹,

Bruin²,

Nilsson³

et al. 2012

PsycEXTRA Dataset

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Several judgment and decision-making tasks are assumed to involve memory functions, but significant knowledge gaps on the memory processes underlying these tasks remain. In a study on 568 adults between 25 to 80 years, hypotheses were tested on the specific relationships between individual differences in working memory, episodic memory, and semantic memory, respectively, and six main components of decision-making competence. In line with the hypotheses, working memory was positively related with the more cognitively-demanding tasks (Resistance to Framing, Applying Decision Rules, and Under/Overconfidence), whereas episodic memory was positively associated with a more experience-based judgment task (Recognizing Social Norms). Furthermore, semantic memory was positively related with two more knowledge-based decision-making tasks (Consistency in Risk Perception and Resistance to Sunk Costs). Finally, the age-related decline observed in some of the decision-making tasks was (partially or totally) mediated by the age-related decline in working memory or episodic memory. These findings are discussed in relation to the functional roles fulfilled by different memory processes in judgment and decision-making tasks.Keywords: Judgment and decision making; Decision-making competence; Working memory; Episodic memory; Semantic memory; Cognitive aging; Individual differences. MEMORY AND DECISION MAKING 3The Multifold Relationship Between Memory and Decision Making: An Individual-differences Study Among the more promising research developments in the field of judgment and decision making is the attempt to ground judgment and decision-making processes in findings and models derived from memory research, tracing complex cognitive tasks back to their basic cognitive roots to improve the understanding of how individuals perform these tasks. Indeed, memory can play an important role in several aspects of judgment and decision-making tasks (for reviews see, e.g., Alba, Hutchinson & Lynch, 1991;Dougherty, Gronlund & Gettys, 2003;Tomlinson, Marewski & Dougherty, 2011;Weber, Goldstein & Barlas, 1995), and the age-related decline observed in some aspects of memory functioning (Park, 2000;Park et al., 1996Park et al., , 2002Salthouse, 2004) can mediate part of the age-related changes in decision-making abilities. However, the investigation of the role of memory functions in decision making has been scattered and nonsystematic, leaving various knowledge gaps about which memory functions underly specific decision-making tasks open. The study presented in this paper aims to fill some of these gaps through a systematic analysis of the relationships between individual differences in memory processes and individual differences in various aspects of decision-making competence, guided by a functional view of memory processes in decision making.In the next section, the theoretical background of the research will be presented, followed by the specific hypotheses of the study, which refer to the contribution of different memory processes to ...

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Understanding Client Behavior Rational or Irrational?

Chatterjee¹,

Goetz²

2018

Client Psychology

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Are Older Adults Less Subject to the Sunk-Cost Fallacy Than Younger Adults?

Cited by 119 publications

References 18 publications

On the sunk-cost effect in economic decision-making: a meta-analytic review

On the sunk-cost effect in economic decision-making: a meta-analytic review

The Multifold Relationship Between Memory and Decision Making: An individual-differences study

Understanding Client Behavior Rational or Irrational?

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