The psychology of sunk cost

Rationality in medical treatment decisions: is there a sunk-cost effect?

“…Most notably, residents' evaluations of treatment decisions were not infl uenced by the amount of time and/or money that had already been invested in treating a particular patient; in other words, they did not fall prey to the sunk cost effect when judging different treatment options. Despite the generally robust nature of the sunk cost effect in the psychological literature (Arkes and Blumer, 1985;Brockner, 1992;Bornstein and Chapman, 1994), resident participants' judgments about the optimal course of treatment were not infl uenced by previous treatment decisions. This encouraging fi nding supports other recent research indicating that biases in medical decision making may be more limited than previously thought (Christensen et al, 1995).…”

“…It is not uncommon to study decision making by haying participants evaluate others' behavior, in both non-medical (Baron, 1994) and medical domains (Gruppen et al, 1994). The sunk cost literature has failed to fi nd differences in participants' judgments depending on whether they are asked to make decisions themselves or to evaluate another's decisions (Arkes and Blumer, 1985;Bornstein and Chapman, 1994).…”

“…One bias which is not represented in the research on medical decision making is the escalation, or sunk cost, effect (Arkes and Blumer, 1985;Brockner, 1992). The sunk cost effect occurs when a decision maker continues to invest resources into a previously selected action or plan even after the plan has proven to be the suboptimal option.…”

“…The sunk cost effect occurs when a decision maker continues to invest resources into a previously selected action or plan even after the plan has proven to be the suboptimal option. For example, Arkes and Blumer (1985) told participants to imagine that they had purchased tickets for two non-refundable ski trips on the same weekend. Even though they were told to assume further that they would enjoy the trip purchased second more, a majority of participants chose the trip purchased fi rst, which had cost them more money.…”

“…The sunk cost effect has been shown to be a robust cognitive bias in a variety of non-medical domains, such as personal decisions (Arkes and Blumer, 1985;Bornstein and Chapman, 1994), investment decisions in business (Staw, 1976;Garland, 1990), and employee performance evaluations (Bazerman et al, 1982). A number of reasons may underlie decision makers' sunk cost behavior (Bornstein and Chapman, 1994).…”