Sensitivity to Sunk Costs Depends on Attention to the Delay

Abstract

In the WebSurf task, humans forage for videos paying costs in terms of wait times on a time-limited task. A variant of the task in which demands during the wait time were manipulated revealed the role of attention in susceptibility to sunk costs. Consistent with parallel tasks in rodents, previous studies have found that humans (undergraduates measured in lab) preferred shorter delays, but waited longer for more preferred videos, suggesting that they were treating the delays economically. In an Amazon Mechanical Turk (mTurk) sample, we replicated these predicted economic behaviors for a majority of participants. In the lab, participants showed susceptibility to sunk costs in this task, basing their decisions in part on time they have already waited, which we also observed in the subset of the mTurk sample that behaved economically. In another version of the task, we added an attention check to the wait phase of the delay. While that attention check further increased the proportion of subjects with predicted economic behaviors, it also removed the susceptibility to sunk costs. These findings have important implications for understanding how cognitive processes, such as the deployment of attention, are key to driving re-evaluation and susceptibility to sunk costs.

Sunk cost sensitivity in mice, rats, and humans on the Restaurant Row and WebSurf tasks cannot be explained by attrition biases alone

“…(Ott et al 2021) already acknowledge in their preprint that their model cannot explain behavior in the variants of Restaurant Row and Web-Surf that have a separate offer phase, and agree with our conclusions that decisions made in the offer and wait phases arise from different decision processes. As we have argued elsewhere Kazinka, MacDonald, and Redish 2021;Sweis, Abram, et al 2018), we agree that behavior in the offer and wait phases arise from different decision processes, consistent with both multiple-decision theories (Redish 2013 and commitment hypotheses (Gollwitzer, Heckhausen, and Steller 1990;Achtziger and Gollwitzer 2007). Although Ott et al acknowledge that offer and wait phases may well be different, they do not provide any explanation as to why the two phases are different as to sunk costs.…”

“…When humans were distracted from the delay countdown, we found that the sunk costs disappeared (Kazinka, MacDonald, and Redish 2021). Similarly, in rich environments (when the offer distribution is such that rodents can easily earn a large amount of food within the environment), we do not see sunk costs .…”

“…We suspect that a more parsimonious explanation of the data is the increased motivation provided by Pavlovian associations between the countdown in the wait zone and the value of the outcome. This would show decreases with decreased attention (Kazinka, MacDonald, and Redish 2021), as well as sensitivity to factors that increase that relationship to the reward zone (such as conditioned place preference) (Robinson and Berridge 1993;Berridge 1996;Clark, Hollon, and Phillips 2012;Fanselow and Wassum 2015). This is a form of the endowment effect (Kahneman, Knetsch, andThaler 1990, 1991;Redish, Schultheiss, and Carter 2016) and is similar to the deliberative vs implementational mindset constructs in the human literature (Gollwitzer, Heckhausen, and Steller 1990;Achtziger and Gollwitzer 2007).…”

“…The more parsimonious explanation is that subjects make a separate decision before committing to a choice and then show a sensitivity to sunk costs only after commitment (Sweis, Abram, et al 2018;Kazinka, MacDonald, and Redish 2021;Gollwitzer, Heckhausen, and Steller 1990;Achtziger and Gollwitzer 2007). This hypothesis suggests that one should see this difference, even without an explicit offer phase.…”

“…Importantly, subjects could again, quit out of the wait phase. We have run several cohorts of humans on this two-phase variant both in-person and online (Sweis, Abram, et al 2018;Kazinka, MacDonald, and Redish 2021;Huynh et al 2021). We will use the terms "offer zone" / "offer phase" and "wait zone" / "wait phase" interchangeably in this document.…”