What were they thinking? Reducing sunk-cost bias in a life-span sample

Jo Nell Strough, Wändi Bruine De Bruin, Andrew M. Parker, Tara Karns, Philip Lemaster, Nipat Pichayayothin, Rebecca Delaney, Rachel Stoiko

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

We tested interventions to reduce "sunk-cost bias," the tendency to continue investing in failing plans even when those plans have soured and are no longer rewarding. We showed members of a national U.S. life-span panel a hypothetical scenario about a failing plan that was halfway complete. Participants were randomly assigned to an intervention to focus on how to improve the situation, an intervention to focus on thoughts and feelings, or a no-intervention control group. First, we found that the thoughts and feelings intervention reduced sunk-cost bias in decisions about project completion, as compared to the improvement intervention and the no-intervention control. Second, older age was associated with greater willingness to cancel the failing plan across all 3 groups. Third, we found that introspection processes helped to explain the effectiveness of the interventions. Specifically, the larger reduction in sunk-cost bias as observed in the thoughts and feelings intervention (vs. the improvement intervention) was associated with suppression of future-oriented thoughts of eventual success, and with suppression of augmentations of the scenario that could make it seem reasonable to continue the plan. Fourth, we found that introspection processes were related to age differences in decisions. Older people were less likely to mention future-oriented thoughts of eventual success associated with greater willingness to continue the failing plan. We discuss factors to consider when designing interventions for reducing sunk-cost bias.

Original languageEnglish (US)
Pages (from-to)724-736
Number of pages13
JournalPsychology and aging
Volume31
Issue number7
DOIs
StatePublished - Nov 1 2016

Keywords

  • Age differences
  • Decision making
  • Intervention
  • Sunk costs
  • Time horizons

ASJC Scopus subject areas

  • Social Psychology
  • Aging
  • Geriatrics and Gerontology

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