The Interpersonal Sunk-Cost Effect
Olivola identifies a version of the sunk cost effect that the theory had not predicted. Every existing account treats it as a private matter, a person responding to their own past investment. Across eight experiments with more than six thousand participants, he shows that people also honour other people's sunk costs: told that someone else has already spent money, time or effort on something, they choose the inferior option in order not to waste that investment, even though it is not theirs and cannot be recovered by anyone. The effect did not depend on how close the decision maker was to the person who had paid, and did not require that person to be watching. That rules out the obvious explanations of loyalty or reputation management, and it is a problem for accounts based on personal regret or on protecting one's own self-image, since neither applies when the cost was somebody else's. A finding this vault can use directly in commercial contexts.
Olivola identifies a version of the sunk cost effect that the theory had not predicted. Every existing account treats it as a private matter, a person responding to their own past investment. Across eight experiments with more than six thousand participants, he shows that people also honour other people's sunk costs: told that someone else has already spent money, time or effort on something, they choose the inferior option in order not to waste that investment, even though it is not theirs and cannot be recovered by anyone. The effect did not depend on how close the decision maker was to the person who had paid, and did not require that person to be watching. That rules out the obvious explanations of loyalty or reputation management, and it is a problem for accounts based on personal regret or on protecting one's own self-image, since neither applies when the cost was somebody else's. A finding this vault can use directly in commercial contexts.
Written from the abstract, OpenAlex.
What our sources record
Reproduced as it was written when this source was checked, figures and all.
Psychological Science. Eight experiments, N = 6,076. Effects not moderated by social closeness or by whether the sunk costs were observed. Abstract and reported design only.
Where we use it
- Why You Finish the Series You Stopped Enjoying, Why We Act
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The link below was matched against the publisher's record on title, first author and year, and all three agree.
The source
https://doi.org/10.1177/0956797617752641
DOI: 10.1177/0956797617752641