The sunk cost effect across species: A review of persistence in a course of action due to prior investment

Abstract

The sunk cost effect is the bias or tendency to persist in a course of action due to prior investments of effort, money or time. At the time of the only review on the sunk cost effect across species (Arkes & Ayton, 1999), research with nonhuman animals had been ecological in its nature, and the findings about the effect of past investments on current choice were inconclusive. However, in the last decade a new line of experimental laboratory-based research has emerged with the promise of revolutionizing the way we approach the study of the sunk cost effect in nonhumans. In the present review we challenge Arkes and Ayton's conclusion that the sunk cost effect is exclusive to humans, and describe evidence for the sunk cost effect in nonhuman animals. By doing so, we also challenge the current explanations for the sunk cost effect in humans, as they are not applicable to nonhumans. We argue that a unified theory is called for, because different independent variables, in particular, investment amount, have the same influence on the sunk cost effect across species. Finally, we suggest possible psychological mechanisms shared across different species, contrast and depreciation, that could explain the sunk cost effect.

The sunk cost effect: short-term behavioural evidence in adults

“…Taken together, these results suggest that short-term physical investments (real or imagined) in behavioural tasks reveal either a reverse sunk cost effect or fail to find an effect at all. This stands in contrast to the majority of published literature on the sunk cost effect (Arkes & Ayton, 1999;Magalhães & White, 2016).…”

“…In line with a sunk cost effect, the authors found that pigeons preferred the up to 30-response key, even when this involved a higher work requirement. Subsequent research has supported this finding using further variations of the conditioning paradigm (Magalhaes & White, 2014a;Magalhães & White, 2016).…”

“…The most recent theory for why the effect occurs was proposed by Magalhães and White (2016) whose aim was to account for findings across human and non-human animal research by proposing a more unified theory of sunk cost effect behaviour. They proposed a contrast effect, where the option or choice associated with an investment is preferred to an alternative where no investment has been made and its value unclear.…”

“…In these instances, and unlike other explanations such as Prospect Theory, waste avoidance, and selfjustification, the contrast effect can account for prevailing findings where the effect is reduced or reversed. The theory can also account for the research that finds a sunk cost effect in non-human animals where it is difficult or inappropriate to assess psychological constructs such as waste avoidance and self-justification (Magalhães & White, 2016).…”

“…The sunk cost effect is the tendency to invest resources into an endeavour because prior resources have already been invested into it -even if better alternatives are available (Arkes & Ayton, 1999;Arkes & Blumer, 1985;Arkes & Hutzel, 2000;Conlon & Garland, 1993;Garland, 1990;Garland & Conlon, 1998;Garland & Newport, 1991;Magalhães & White, 2016;Navarro & Fantino, 2005, 2009Strough et al, 2014;Thaler, 1980). Since prior expenditures cannot be retrieved, only future incremental costs and benefits of continuing or discontinuing should be considered.…”