IDEAS home Printed from https://ideas.repec.org/a/eee/touman/v40y2014icp425-435.html
   My bibliography  Save this article

Sunk costs and travel cancellation: Focusing on temporal cost

Author

Listed:
  • Park, Jeong-Yeol
  • Jang, SooCheong (Shawn)

Abstract

Tourism products differ from ordinary retail products in terms of the spatial and temporal separation between the purchase and experiencing the product. Despite its importance, temporal separation has not drawn much attention in tourism research. The main objective of this study is to understand the effects of temporal sunk costs on potential travelers' cancellation intentions, in addition to monetary sunk costs. The results of this study suggested the possibility that temporal costs can be converted into monetary costs, but the conversion relationship may not be linear. This study also indicated that travelers' intentions to cancel a travel product decreased as the temporal and monetary sunk costs increased. Further, prior experience moderated the relationship when temporal sunk costs were involved, suggesting that repeat visitors' intentions to cancel their reservations are more influenced by temporal sunk costs than first-time visitors. Further discussion and implications are provided in the main body of this paper.

Suggested Citation

  • Park, Jeong-Yeol & Jang, SooCheong (Shawn), 2014. "Sunk costs and travel cancellation: Focusing on temporal cost," Tourism Management, Elsevier, vol. 40(C), pages 425-435.
    • Handle: RePEc:eee:touman:v:40:y:2014:i:c:p:425-435
    DOI: 10.1016/j.tourman.2013.08.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0261517713001519
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.tourman.2013.08.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Yuksel, Atila & Yuksel, Fisun & Bilim, Yasin, 2010. "Destination attachment: Effects on customer satisfaction and cognitive, affective and conative loyalty," Tourism Management, Elsevier, vol. 31(2), pages 274-284.
    2. Leclerc, France & Schmitt, Bernd H & Dube, Laurette, 1995. "Waiting Time and Decision Making: Is Time like Money?," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 22(1), pages 110-119, June.
    3. Robin L. Soster & Ashwani Monga & William O. Bearden, 2010. "Tracking Costs of Time and Money: How Accounting Periods Affect Mental Accounting," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 37(4), pages 712-721, December.
    4. Kogut, Carl A., 1992. "Recall in consumer search," Journal of Economic Behavior & Organization, Elsevier, vol. 17(1), pages 141-151, January.
    5. Jacoby, Jacob & Szybillo, George J & Berning, Carol Kohn, 1976. "Time and Consumer Behavior: An Interdisciplinary Overview," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 2(4), pages 320-339, March.
    6. Richard H. Thaler, 2008. "Mental Accounting and Consumer Choice," Marketing Science, INFORMS, vol. 27(1), pages 15-25, 01-02.
    7. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    8. Torsten Bornemann & Christian Homburg, 2011. "Psychological Distance and the Dual Role of Price," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 38(3), pages 490-504.
    9. Shafir, Eldar & Thaler, Richard H., 2006. "Invest now, drink later, spend never: On the mental accounting of delayed consumption," Journal of Economic Psychology, Elsevier, vol. 27(5), pages 694-712, October.
    10. Quintal, Vanessa Ann & Lee, Julie Anne & Soutar, Geoffrey N., 2010. "Risk, uncertainty and the theory of planned behavior: A tourism example," Tourism Management, Elsevier, vol. 31(6), pages 797-805.
    11. Greene, David L., 2012. "Rebound 2007: Analysis of U.S. light-duty vehicle travel statistics," Energy Policy, Elsevier, vol. 41(C), pages 14-28.
    12. Dhar, Ravi & Nowlis, Stephen M, 1999. "The Effect of Time Pressure on Consumer Choice Deferral," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 25(4), pages 369-384, March.
    13. Cox, James C & Oaxaca, Ronald L, 1989. "Laboratory Experiments with a Finite-Horizon Job-Search Model," Journal of Risk and Uncertainty, Springer, vol. 2(3), pages 301-329, September.
    14. Tan, Hun-Tong & Yates, J. Frank, 1995. "Sunk Cost Effects: The Influences of Instruction and Future Return Estimates," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(3), pages 311-319, September.
    15. Rajagopal, Priyali & Rha, Jong-Youn, 2009. "The mental accounting of time," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 772-781, October.
    16. Zeelenberg, Marcel & van Dijk, Eric, 1997. "A reverse sunk cost effect in risky decision making: Sometimes we have too much invested to gamble," Journal of Economic Psychology, Elsevier, vol. 18(6), pages 677-691, November.
    17. Zaichkowsky, Judith Lynne, 1985. "Measuring the Involvement Construct," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 12(3), pages 341-352, December.
    18. Thaler, Richard, 1980. "Toward a positive theory of consumer choice," Journal of Economic Behavior & Organization, Elsevier, vol. 1(1), pages 39-60, March.
    19. Ritesh Saini & Ashwani Monga, 2008. "How I Decide Depends on What I Spend: Use of Heuristics Is Greater for Time than for Money," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 34(6), pages 914-922, February.
    20. Arkes, Hal R. & Blumer, Catherine, 1985. "The psychology of sunk cost," Organizational Behavior and Human Decision Processes, Elsevier, vol. 35(1), pages 124-140, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guo, Xiaolong & Dong, Yufeng & Ling, Liuyi, 2016. "Customer perspective on overbooking: The failure of customers to enjoy their reserved services, accidental or intended?," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 65-72.
    2. Hajibaba, Homa & Gretzel, Ulrike & Leisch, Friedrich & Dolnicar, Sara, 2015. "Crisis-resistant tourists," Annals of Tourism Research, Elsevier, vol. 53(C), pages 46-60.
    3. Hajibaba, Homa & Boztuğ, Yasemin & Dolnicar, Sara, 2016. "Preventing tourists from canceling in times of crises," Annals of Tourism Research, Elsevier, vol. 60(C), pages 48-62.
    4. Shuqair, Saleh & Costa Pinto, Diego & Cruz-Jesus, Frederico & Mattila, Anna S. & da Fonseca Guerreiro, Patricia & Kam Fung So, Kevin, 2022. "Can customer relationships backfire? How relationship norms shape moral obligation in cancelation behavior," Journal of Business Research, Elsevier, vol. 151(C), pages 463-472.
    5. Li, Jianping & Feng, Yuyao & Li, Guowen & Sun, Xiaolei, 2020. "Tourism companies' risk exposures on text disclosure," Annals of Tourism Research, Elsevier, vol. 84(C).
    6. Taiga Saito & Akihiko Takahashi & Noriaki Koide & Yu Ichifuji, 2017. "Optimal Overbooking Strategy in Online Hotel Booking Systems," CIRJE F-Series CIRJE-F-1065, CIRJE, Faculty of Economics, University of Tokyo.
    7. Francesca Canio & Elisa Martinelli & Giampaolo Viglia, 2023. "Reopening after the pandemic: leveraging the destination image to offset the negative effects of perceived risk," Italian Journal of Marketing, Springer, vol. 2023(2), pages 99-118, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ronayne, David & Sgroi, Daniel & Tuckwell, Anthony, 2021. "Evaluating the sunk cost effect," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 318-327.
    2. Duxbury, Darren, 2012. "Sunk costs and sunk benefits: A re-examination of re-investment decisions," The British Accounting Review, Elsevier, vol. 44(3), pages 144-156.
    3. Jae‐Do Song, 2023. "Excessive banking preference in emissions trading," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 448-458, January.
    4. Daniel Friedman & Kai Pommerenke & Rajan Lukose & Garrett Milam & Bernardo Huberman, 2007. "Searching for the sunk cost fallacy," Experimental Economics, Springer;Economic Science Association, vol. 10(1), pages 79-104, March.
    5. Antonides, Gerrit, 1995. "Entrapment in risky investments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 24(3), pages 447-461.
    6. Kalayci, Erkan & Basdas, Ulkem, 2010. "Does the prospect theory also hold for power traders? Empirical evidence from a Swiss energy company," Review of Financial Economics, Elsevier, vol. 19(1), pages 38-45, January.
    7. Sezer Ülkü & Chris Hydock & Shiliang Cui, 2020. "Making the Wait Worthwhile: Experiments on the Effect of Queueing on Consumption," Management Science, INFORMS, vol. 66(3), pages 1149-1171, March.
    8. Hirota, Shinichi & Suzuki-Löffelholz, Kumi & Udagawa, Daisuke, 2020. "Does owners’ purchase price affect rent offered? Experimental evidence," Journal of Behavioral and Experimental Finance, Elsevier, vol. 25(C).
    9. Liu, Hsin-Hsien, 2013. "How promotional frames affect upgrade intentions," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 237-248.
    10. Edwards, Kimberley D., 1996. "Prospect theory: A literature review," International Review of Financial Analysis, Elsevier, vol. 5(1), pages 19-38.
    11. Cheng, Andong & Baskin, Ernest, 2021. "Disproportionate redemption discounting: Mental accounting of discounted credit," Journal of Business Research, Elsevier, vol. 128(C), pages 156-163.
    12. Chu, Hsunchi & Liao, Shuling, 2010. "Buying while expecting to sell: The economic psychology of online resale," Journal of Business Research, Elsevier, vol. 63(9-10), pages 1073-1078, September.
    13. Rajagopal, Priyali & Rha, Jong-Youn, 2009. "The mental accounting of time," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 772-781, October.
    14. Arkes, Hal R. & Hirshleifer, David & Jiang, Danling & Lim, Sonya, 2008. "Reference point adaptation: Tests in the domain of security trading," Organizational Behavior and Human Decision Processes, Elsevier, vol. 105(1), pages 67-81, January.
    15. Eduard Marinov, 2017. "The 2017 Nobel Prize in Economics," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 117-159.
    16. Frederiks, Elisha R. & Stenner, Karen & Hobman, Elizabeth V., 2015. "Household energy use: Applying behavioural economics to understand consumer decision-making and behaviour," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 1385-1394.
    17. Tan, Hun-Tong & Yates, J. Frank, 2002. "Financial Budgets and Escalation Effects," Organizational Behavior and Human Decision Processes, Elsevier, vol. 87(2), pages 300-322, March.
    18. Gabriel R. Bitran & Juan-Carlos Ferrer & Paulo Rocha e Oliveira, 2008. "OM Forum--Managing Customer Experiences: Perspectives on the Temporal Aspects of Service Encounters," Manufacturing & Service Operations Management, INFORMS, vol. 10(1), pages 61-83, July.
    19. Durham, Yvonne & Manly, Tracy S. & Ritsema, Christina, 2014. "The effects of income source, context, and income level on tax compliance decisions in a dynamic experiment," Journal of Economic Psychology, Elsevier, vol. 40(C), pages 220-233.
    20. Ran Kivetz, 2003. "The Effects of Effort and Intrinsic Motivation on Risky Choice," Marketing Science, INFORMS, vol. 22(4), pages 477-502, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:touman:v:40:y:2014:i:c:p:425-435. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/tourism-management .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.