Sunk Costs on Decision-Making Across Species

Decision-making is a fundamental psychological process, where the course of action can shape human behavior as well as perceptions of the world. An important concept in determination is the sunk cost fallacy; a classification of cognitive bias that leads to continued investments in nonbeneficial courses of action simply because of prior investment of significant resources such as time or money, which cannot be recovered.     

Dr. Brian Sweis et al. (2018) explore psychological decision-making in animal models, such as mice and rats, to understand if the subjects exhibit sunk cost sensitivity. The aim of his research is to gain insight into managerial behaviors in non-human models; and whether or not animal models participate in cognitive biases, and the neural mechanisms behind them. Through considerable research, Dr. Sweis and his team discovered that across species, sensitivity to sunk costs is conserved, challenging the notion that sunk cost cognition is uniquely human. Interestingly, sunk cost sensitivities only occurred after the initial decision was made; if the subject decided to wait, then the longer they waited, the less likely they were to quit. This means that subjects made rational and logical choices before they committed to waiting but once invested, they became more prone to bias, making ongoing decisions distorted. 

In Harm to Others Reduces the Sunk-Cost Effects, Dr. Hamzagic et al. (2021) investigates how morals and ethics influence irrational behaviors tied to sunk costs. This study is revolutionary due to ethics and decision-making being studied alongside one another rather that separately. Dr. Hamzagic’s studies were divided into 3 experiments. Experiment one, subjects were given vignettes with conditions of varying sunk costs (high and low) as well as varying levels of potential harm. They found that the sunk cost-effect was significantly smaller in simulations where harm would occur to others, in essence subjects were less trapped by sunk costs when ethical concerns were on the line. In experiment 2, what was being tested was the role perspective plays in decision-making. The conditions being modulated were who the decision was for (subject or someone else) as well as high and low sunk costs. Surprisingly, researchers found that perspective does not have any significant effects on decision making, sunk cost effects were still present regardless of who the decision was for. This means subjects stick to irrational decisions even when deciding for others. Finally in experiment 3, they retested experiment 1 to confirm or deny key findings. The same conditions were present but with the addition of Bayesian analysis where they found the results were statistically strong and replicative. 

A multitude of research is being conducted on the biases of decision-making with sunk costs being an area of interest. Through sustained research, models can then predict decision making based on what the given circumstances are. 

REFERENCES

Brian M. Sweis et al. ,Sensitivity to “sunk costs” in mice, rats, and  humans.Science361,178-181(2018).DOI:10.1126/science.aar8644

Hamzagic, Z.I., Derksen, D.G., Matsuba, M.K. et al. Harm to others reduces the sunk-cost effect. Mem Cogn 49, 544–556 (2021). https://doi.org/10.3758/s13421-020-01112-7