The effect of a prior investment on choice: the sunk cost effect.

Abstract

We investigated the effect of prior investment on choice in pigeons, namely, the sunk cost effect, which is a tendency to continue an endeavor once a prior investment has been made, despite a better option being available. In a concurrent-chains procedure, pigeons chose between left and right keys in the choice phase leading to different work requirements in the outcome phase. Within each session, two components were signaled by red or green keys in the choice phase. Components were identical, except that in red components, the choice was preceded by a prior investment of 20 pecks on the left key, whereas in green components, the investment of 20 pecks was on the right key. Preference for the key with the prior investment was studied in a series of experiments in which we manipulated the absence or presence of the investment (Experiments 1a and 1b) and size of the investment (Experiments 2 and 3). We also investigated whether the bias observed was a result of carryover effects or of the sunk cost effect (Experiment 4). Overall, the results showed that choice was biased toward the alternative associated with the prior investment, consistent with the sunk cost effect, an effect that can be understood in terms of within-trial contrast and the delay-reduction hypothesis.