Because it was the first one – The effect of purchase order on the sunk-cost effect

  • Thomas RobbertEmail author
  • Lennart Straus
  • Stefan Roth
Part of the Fokus Dienstleistungsmarketing book series (FDM)


Imagine you booked a ski trip to Michigan for $100. Several weeks later, you buy a ski trip to Wisconsin for $50. Later you notice that they take place at the same weekend. You assume that you will enjoy Wisconsin more. Which trip will you go on? When Arkes and Blumer (1985) asked their participants, 54% indicated to use the alternative with the higher costs, though they like it less.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Arkes, H.R./Blumer, C. (1985): The psychology of sunk cost, in: Organizational Behavior and Human Decision Processes, Vol. 35, No. 1, pp. 124-140.Google Scholar
  2. Astebro, T./Jeffrey, S.A./Adomdza, G.K. (2007): Inventor perseverance after being told to quit: the role of cognitive biases, in: Journal of Behavioral Decision Making, Vol. 20, No. 3, pp. 253–272.Google Scholar
  3. Conlon, D.E./Garland, H. (1993): The role of project completion information in resource allocation decisions, in: Academy of Management Journal, Vol. 36, No. 2, pp. 402–413.Google Scholar
  4. Cunha, M./Caldieraro, F. (2009): Sunk-cost effects on purely behavioral investments, in: Cognitive Science, Vol. 33, No. 1, pp. 105–113.Google Scholar
  5. Cunha, M./Caldieraro, F. (2010): On the Observability of Purely Behavioral Sunk‐Cost Effects: Theoretical and Empirical Support for the BISC Model, in: Cognitive science, Vol. 34, No. 8, pp. 1384-1387.Google Scholar
  6. Dick, A.S./Lord, K.L. (1998): The Impact of Membership Fees on Consumer Attitude and Choice, in: Psychology and Marketing, Vol. 15, No. 1, pp. 41-58.Google Scholar
  7. Festinger, L. (1957): A Theory of Cognitive Dissonance. Stanford.Google Scholar
  8. Garland, H./Newport, S. (1991): Effects of Absolute and Relative Sunk Costs on the Decision to Persist with a Course of Action, in: Organizational Behavior and Human Decision Processes, Vol. 48, No. 1, pp. 55-69.Google Scholar
  9. Gourville, J.T./Soman, D. (1998): Payment Depreciation: The Behavioural Effects of Temporally Separating Payments from Consumption, in: Journal of Consumer Research, Vol. 25, No. 2, pp. 160-174.Google Scholar
  10. Greitemeyer, T./Schulz-Hardt, S./Popien, G./Frey, D. (2005): Der Einfluss versunkener monetärer und zeitlicher Kosten auf Ressourcenallokationen, in: Zeitschrift für Arbeits- und Orga-nisationspsychologie A&O, 49. Jg., Nr. 1, pp. 35-43.Google Scholar
  11. Guler, I. (2007): Throwing good money after bad? Political and institutional influences on sequential decision making in the venture capital industry, in: Administrative Science Quarterly, Vol. 52, No. 2, pp. 248-285.Google Scholar
  12. Janssen, M.A./Kohler, T.A./Scheffer, M. (2003): Sunk-cost effects and vulnerability to collapse in ancient Societies, in: Current Anthropology, Vol. 44, No. 5, pp. 722–728.Google Scholar
  13. Just, D.R./Wansink, B. (2011): The Flat-Rate Pricing Paradox: Conflicting Effects of “All-You-Can-Eat” Buffet Pricing, in: Review of Economics and Statistics, Vol. 93, No. 1, pp. 193-200.Google Scholar
  14. Kahneman, D./Knetsch, J.L./Thaler, R.H. (1991): Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias, in: The Journal of Economic Perspectives, Vol. 5, No. 1, pp. 193-206.Google Scholar
  15. Kahneman, D./Tversky, A. (1979): Prospect Theory: An Analysis of Decision under Risk, in: Econometrica, Vol. 47, No. 2, pp. 263-291.Google Scholar
  16. Keil, M./Rai, A./Mann, J. (2000): Why software projects escalate: an empirical analysis and test of four theoretical models, in: MIS Quarterly, Vol. 24, No. 4, pp. 631–664.Google Scholar
  17. Knetsch, J.L. (1989): The endowment effect and evidence of nonreversible indifference curves, in: The American Economic Review, Vol. 79, No. 5, pp. 1277-1284.Google Scholar
  18. Landman, J. (1987): Regret and elation following action and inaction affective responses to positive versus negative outcomes, in: Personality and Social Psychology Bulletin, Vol. 13, No. 4, pp. 524-536.Google Scholar
  19. Loomes, G./Sugden, R. (1982): Regret Theory: An Alternative Theory of Rational Choice Under Uncertainty, in: Economic Journal, Vol. 92, No. 368, pp. 805-824.Google Scholar
  20. Louviere, J.J./Islam, T./Wasi, N./Street, D./Burgess, L. (2008): Designing discrete choice experiments: Do optimal designs come at a price?, in: Journal of Consumer Research, Vol. 35, No. 2, pp. 360-375.Google Scholar
  21. Manez, J.A./Rochina-Barrachina, M.E./Sanchis, A./Sanchis, J.A. (2009): The role of sunk costs in the decision to invest in R&D, in: Journal of Industrial Economics, Vol. 57, No. 4, pp. 712–735.Google Scholar
  22. Otto, A.R. (2010): Three attempts to replicate the behavioral sunk-cost effect: a note on Cunha and Caldieraro (2009), in: Cognitive Science, Vol. 34, No. 8, pp. 1379–1383.Google Scholar
  23. Phillips, O.R./Battalio, R.C./Kogut, C.A. (1991): Sunk and opportunity costs in valuation and bidding, in: Southern Economic Journal, Vol. 58, No. 1, pp. 112-128.Google Scholar
  24. Robbert, T. (2013): Dienstleistungstarife und Nutzungsentscheidungen, Wiesbaden.Google Scholar
  25. Robbert, T./Roth, S./Straus, L. (2013): Sunk-Costs und die Nutzung von Dienstleistungen, in: Roth, S. (Ed.): Aktuelle Beiträge zur Dienstleistungsforschung, Wiesbaden, pp. 29-47.Google Scholar
  26. Roth, S./Robbert, T./Straus, L. (2014): On the Sunk-Cost Effect in Economic Decision Making - A Meta-Analytic Review, in: Business Research, Vol. 8, No. 1, pp. 99-138.Google Scholar
  27. Samuelson, W./Zeckhauser, R. (1988): Status Quo Bias in Decision Making, in: Journal of Risk and Uncertainty, Vol. 1, No. 1, pp. 7-59.Google Scholar
  28. Sleesman, D.J./Conlon, D.E./McNamara, G./Miles, J.E. (2012): Cleaning Up the Big Muddy: A Meta-Analytic Review of the Determinants of Escalation of Commitment, in: The Academy of Management Journal, Vol. 55, No. 3, pp. 541-562.Google Scholar
  29. Soman, D. (2001): The Mental Accounting of Sunk Time Costs: Why Time is not Like Money, in: Journal of Behavioral Decision Making, Vol. 14, No. 3, pp. 169-185.Google Scholar
  30. Soman, D./Cheema, A. (2001): The Effect of Windfall Gains on the Sunk-Cost Effect, in: Marketing Letters, Vol. 12, No. 1, pp. 51-62.Google Scholar
  31. Soman, D./Gourville, J.T. (2001): Transaction Decoupling: How Price Bundling Affects the Decision to Consume, in: Journal of Marketing Research, Vol. 38, No. 1, pp. 30-44.Google Scholar
  32. Strahilevitz, M.A./Loewenstein, G. (1998): The effect of ownership history on the valuation of objects, in: Journal of Consumer Research, Vol. 25, No. 3, pp. 276-289.Google Scholar
  33. Strough, J.N./Mehta, C.M./McFall, J.P./Schuller, K.L. (2008): Are older adults less subject to the sunk-cost fallacy than younger adults?, in: Psychological Science, Vol. 19, No. 7, pp. 650–652.Google Scholar
  34. Tan, H.T./Yates, J.F. (1995): Sunk Cost Effects: The Influences of Instruction and Future Return Estimates, in: Organizational Behavior and Human Decision Processes, Vol. 63, No. 3, pp. 311-319.Google Scholar
  35. Thaler, R.H. (1980): Toward a Positive Theory of Consumer Choice, in: Journal of Economic Behavior and Organization, Vol. 1, No. 1, pp. 39-60.Google Scholar
  36. Thaler, R.H. (1985): Mental Accounting and Consumer Choice, in: Marketing Science, Vol. 4, No. 3, pp. 199-214.Google Scholar
  37. Thaler, R.H. (1999): Mental Accounting Matters, in: Journal of Behavioral Decision Making, Vol. 12, No. 3, pp. 183-206.Google Scholar
  38. Zeelenberg, M./Van Dijk, E. (1997): A reverse sunk cost effect in risky decision making: Sometimes we have too much invested to gamble, in: Journal of Economic Psychology, Vol. 18, No. 6, pp. 677-691.Google Scholar

Copyright information

© Springer Fachmedien Wiesbaden GmbH 2017

Authors and Affiliations

  1. 1.TU KaiserslauternKaiserslauternDeutschland

Personalised recommendations