Sunk Cost Effect and Contextual Rules: Role of Incentives for Quitting and Persistence

Abstract

The sunk cost effect is the willingness to continue persisting in a course of action despite negative feedback and investments of time, money or effort. The present study inves­tigated the effect of the persistence and desistance instructions on the occurrence of the sunk cost effect. College students participated in a computer game in which they produced points by typing on the letter A on the keyboard and completing Fixed Ratio schedules. When par­ticipants press L they end the trial and star a new one. The values of the schedules were FR 10, 40, 80 and 160 with probabilities of 50%, 25%, 12.5% and 12.5% respectively. The conditions ranged from A to D, with desistance’s instructions (conditions C) and persistence’s instruc­tions (conditions D). The sequence of conditions was ABCDCD. Fixed-ratio schedules 10, which were present during condition A and half of the following conditions, were considered the optimal ratio where desistance were not expected. After this ratio, permanence in respond­ing was considered persistence. The results showed that 7 of the 10 participants maintained a constant response throughout the experiment, regardless of the instruction that was present. 4 of these participants had a single response during all schedules: they only persisted or they only gave up. Overall, all participants showed persistence in more than 50% of the trials (with the exception of P7), demonstrating the occurrence of the sunk cost effect and that the present instructions did not influence the occurrence of the effect.