TY  - RPRT
        AU  - Ronayne, David
AU  - Sgroi, Daniel
AU  - Tuckwell, Anthony
        TI  - Evaluating the Sunk Cost Effect
        PY  - 2021/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 14257
        UR  - https://www.iza.org/publications/dp14257
        AB  - We provide experimental evidence of behavior consistent with the sunk cost effect. Subjects who earned a lottery via a real-effort task were given an opportunity to switch to a dominant lottery; 23% chose to stick with their dominated lottery. The endowment effect accounts for roughly only one third of the effect. Subjects' capacity for cognitive reflection is a significant determinant of sunk cost behavior. We also find stocks of knowledge or experience (crystallized intelligence) predict sunk cost behavior, rather than algorithmic thinking (fluid intelligence) or the personality trait of openness. We construct and validate a scale, the "SCE-8", which encompasses many resources individuals can spend, and offers researchers an efficient way to measure susceptibility to the sunk cost effect. 
        KW  - sunk cost effect
KW  - sunk cost fallacy
KW  - endowment effect
KW  - cognitive ability
KW  - fluid intelligence
KW  - crystallized intelligence
KW  - reflective thinking
KW  - randomized controlled trial
KW  - online experiment
KW  - online survey
KW  - psychological scales
KW  - scale validation
KW  - Raven’s progressive matrices
KW  - international cognitive ability resource
KW  - cognitive reflection test
KW  - openness
        ER  -