On Sunk Costs and Escalation

Sofis, Michael J.; Jarmolowicz, David P.; Hudnall, Jennifer L.; Reed, Derek D.

doi:10.1007/s40732-015-0124-5

Cited by 17 publications

(12 citation statements)

References 23 publications

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“…Because decisions to escalate failed investments are driven by consonance restoration, emotion processing and attempts to save one's self-image (Arkes & Blumer, 1985;Bazerman et al, 1984;Brockner, 1992;Sofis, Jarmolowicz, Hudnall, & Reed, 2015), it is reasonable to hypothesize that activity in the cingulate cortex, insula and precuneus will be higher in escalation decisions (H1). The cingulate cortex is involved in conflict monitoring, integration of monetary rewards with motor responses, and connecting emotion and memories (Botvinick, Cohen, & Carter, 2004;Bush, Luu, & Posner, 2000;van Veen & Carter, 2002;Williams, Bush, Rauch, Cosgrove, & Eskandar, 2004); the insula mediates interoceptive awareness processes and serves as a repository for negativelyvalenced emotions and events (Chen, Li, Xu, & Liu, 2009;Craig, 2009;Flynn, Benson, & Ardila, 1999;Wright, Martis, McMullin, Shin, & Rauch, 2003); and the precuneus mediates self-perception processes (Cavanna & Trimble, 2006).…”

Section: Introductionmentioning

confidence: 99%

Framing and Self-Responsibility Modulate Brain Activities in Decision Escalation

Liang

Yen

et al. 2020

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Section: Introductionmentioning

confidence: 99%

Framing and Self-Responsibility Modulate Brain Activities in Decision Escalation

Liang

Yen

et al. 2020

Preprint

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“…Because decisions to escalate failed investments are driven by consonance restoration (i.e., trying to ensure that one's prior decisions, perceptions and future actions are consistent with one another), emotion processing and attempts to save one's self-image (Arkes & Blumer, 1985;Bazerman et al, 1984;Brockner, 1992;So s, Jarmolowicz, Hudnall, & Reed, 2015), it is reasonable to hypothesize that activity in the cingulate cortex, insula and precuneus will be higher in escalation decisions (H1). The cingulate cortex is involved in con ict monitoring, integration of monetary rewards with motor responses, and connecting emotion and memories (Botvinick, Cohen, & Carter, 2004;Bush, Luu, & Posner, 2000;van Veen & Carter, 2002;Williams, Bush, Rauch, Cosgrove, & Eskandar, 2004); the insula mediates interoceptive awareness processes and serves as a repository for negatively-valenced emotions and events (Chen, Li, Xu, & Liu, 2009;Craig, 2009;Flynn, Benson, & Ardila, 1999;Wright, Martis, McMullin, Shin, & Rauch, 2003); and the precuneus mediates self-perception processes (Cavanna & Trimble, 2006).…”

Section: Introductionmentioning

confidence: 99%

Framing and Self-Responsibility Modulate Brain Activities in Decision Escalation

Liang

Yen

et al. 2020

Preprint

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Background: Escalation of commitment is a common bias in human decision making. The present study examined (1) differences in neural recruitment for escalation and de-escalation decisions of prior investments, and (2) how the activation of these brain networks are modulated by two contextual/confounding factors: (i) responsibility, and (ii) framing of the success probabilities. Results: Imaging data were obtained from functional magnetic resonance imaging (fMRI) applied to 29 participants. A whole-brain analysis was conducted to compare brain activations between conditions. ROI analysis, then, was used to examine if these significant activations were modulated by two contextual factors. Finally, mediation analysis was applied to explore how the contextual factors affect escalation decisions through brain activations. The findings showed that (1) escalation decisions are faster than de-escalation decisions, (2) the corresponding network of brain regions recruited for escalation (anterior cingulate cortex, insula and precuneus) decisions differs from this recruited for de-escalation decisions (inferior and superior frontal gyri), (3) the switch from escalation to de-escalation is primarily frontal gyri dependent, and (4) activation in the anterior cingulate cortex, insula and precuneus were further increased in escalation decisions, when the outcome probabilities of the follow-up investment were positively framed; and activation in the inferior and superior frontal gyri in de-escalation decisions were increased when the outcome probabilities were negatively framed. Conclusions: Escalation and de-escalation decisions recruit different brain regions. Framing of possible outcomes as negative leads to escalation decisions through recruitment of the inferior frontal gyrus. Responsibility for decisions affects escalation decisions through recruitment of the superior (inferior) gyrus, when the decision is framed positively (negatively).

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“…In a study by Siniver, Mealem, and Yaniv ( 2013 ), for example, individuals who were forced to pay prior to getting access to an-all you can buffet ate significantly more than those who were forced to pay after the meal. Further, individuals with a higher BMI may also be more likely to commit the sunk-cost fallacy in a trial-based analog task (Sofis et al 2015 ). By extension, we hypothesize that symptoms associated Binge Eating Disorder, which is often co-morbid with depression symptomology (e.g., Schulz and Laessle 2010 ), may also be associated with a higher propensity to commit the sunk-cost fallacy.…”

Section: Introductionmentioning

confidence: 99%

Sunk costs, psychological symptomology, and help seeking

et al. 2016

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Individuals often allow prior investments of time, money or effort to influence their current behavior. A tendency to allow previous investments to impact further investment, referred to as the sunk-cost fallacy, may be related to adverse psychological health. Unfortunately, little is known about the relation between the sunk-cost fallacy and psychological symptoms or help seeking. The current study used a relatively novel approach (i.e., Amazon.com’s Mechanical Turk crowdsourcing [AMT] service) to examine various aspects of psychological health in internet users (n = 1053) that did and did not commit the sunk-cost fallacy. In this observational study, individuals logged on to AMT, selected the “decision making survey” amongst the array of currently available tasks, and completed the approximately 200-question survey (which included a two-trial sunk cost task, the brief symptom inventory 18, the Binge Eating Scale, portions of the SF-8 health survey, and other questions about treatment utilization). Individuals that committed the fallacy reported a greater number of symptoms related to Binge Eating Disorder and Depression, being bothered more by emotional problems, yet waited longer to seek assistance when feeling ill. The current findings are discussed in relation to promoting help-seeking behavior amongst individuals that commit this logical fallacy.

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On Sunk Costs and Escalation

Cited by 17 publications

References 23 publications

Framing and Self-Responsibility Modulate Brain Activities in Decision Escalation

Framing and Self-Responsibility Modulate Brain Activities in Decision Escalation

Framing and Self-Responsibility Modulate Brain Activities in Decision Escalation

Sunk costs, psychological symptomology, and help seeking

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