Replication of the Interpersonal Sunk Cost Effect

Abstract

Olivola (2018) postulated that the sunk cost fallacy, choosing a less preferred option simply because an original investment was already committed, would be facilitated by interpersonal factors. The prior work had compared sunk cost decisions made individually (intrapersonally) and those made on behalf of someone else (interpersonally) and found the relationship between type of investment and commitment of the sunk cost fallacy to be impacted by both intrapersonal and interpersonal influences. Our study sought to replicate Olivola’s original experimental methods and analyses but advanced his original research question with additional analytic investigation using factorial logistic regression. We found similar results to Olivola, however, we also discovered that committing the sunk cost fallacy was significantly more impacted by the price of the sunk cost rather than the person investing, χ2 (420, N = 423) = 209.41, p < .001, R 2 = .53, OR = 33.11, p < .001. This study expanded prior research findings on how individual investment decisions are influenced by others’ investments by contrasting this outcome with how the amount that is invested or given might be more important than the giver or the situation. This is an important distinction as future research seeks to find what influences people’s decisions for personal investments of money, time, etc.