Does survival threat make us irrational? The effects of disease cues on sunk cost bias

Abstract

Sunk cost bias is a pervasive issue in the real world, manifesting in various domains, such as consumption and investment, influencing consumer well-being. This bias often leads to a misallocation of resources towards less meaningful activities. In the current study, we explored a novel factor, specifically disease cues, that influences the sunk cost bias. Through a survey and four systematic experiments, using both lab and natural manipulations of disease cues, we demonstrate that disease cues encourage individuals to overvalue their prior investments, leading to an increased propensity for sunk cost bias in imagined decision scenarios and real choices. We have also ruled out alternative explanations for our findings. Significantly, we added a survey to directly explore the sunk cost bias and consumer subjective well-being, showing a significant positive relationship between them. Our research contributes to understanding consumer irrational behavior and aims to improve consumer well-being.