IDEAS home Printed from https://ideas.repec.org/a/eee/joepsy/v18y1997i6p677-691.html
   My bibliography  Save this article

A reverse sunk cost effect in risky decision making: Sometimes we have too much invested to gamble

Author

Listed:
  • Zeelenberg, Marcel
  • van Dijk, Eric

Abstract

No abstract is available for this item.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:joepsy:v:18:y:1997:i:6:p:677-691
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167-4870(97)00029-9
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Larrick, Richard P. & Boles, Terry L., 1995. "Avoiding Regret in Decisions with Feedback: A Negotiation Example," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(1), pages 87-97, July.
    2. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-824, December.
    3. Schaubroeck, John & Davis, Elaine, 1994. "Prospect Theory Predictions When Escalation Is Not the Only Chance to Recover Sunk Costs," Organizational Behavior and Human Decision Processes, Elsevier, vol. 57(1), pages 59-82, January.
    4. Arkes, Hal R. & Joyner, Cynthia A. & Pezzo, Mark V. & Nash, Jane Gradwohl & Siegel-Jacobs, Karen & Stone, Eric, 1994. "The Psychology of Windfall Gains," Organizational Behavior and Human Decision Processes, Elsevier, vol. 59(3), pages 331-347, September.
    5. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
    6. Li, Shu, 1995. "Is there a decision weight [pi]?," Journal of Economic Behavior & Organization, Elsevier, vol. 27(3), pages 453-463, August.
    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. Ritov, Ilana, 1996. "Probability of Regret: Anticipation of Uncertainty Resolution in Choice," Organizational Behavior and Human Decision Processes, Elsevier, vol. 66(2), pages 228-236, May.
    9. Zeelenberg, Marcel & Beattie, Jane & van der Pligt, Joop & de Vries, Nanne K., 1996. "Consequences of Regret Aversion: Effects of Expected Feedback on Risky Decision Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 65(2), pages 148-158, February.
    10. Thaler, Richard, 1980. "Toward a positive theory of consumer choice," Journal of Economic Behavior & Organization, Elsevier, vol. 1(1), pages 39-60, March.
    11. John W. Payne & Dan J. Laughhunn & Roy Crum, 1980. "Translation of Gambles and Aspiration Level Effects in Risky Choice Behavior," Management Science, INFORMS, vol. 26(10), pages 1039-1060, October.
    12. Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, vol. 36(6), pages 643-660, June.
    13. David E. Bell, 1982. "Regret in Decision Making under Uncertainty," Operations Research, INFORMS, vol. 30(5), pages 961-981, October.
    14. Boles, Terry L. & Messick, David M., 1995. "A Reverse Outcome Bias: The Influence of Multiple Reference Points on the Evaluation of Outcomes and Decisions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 61(3), pages 262-275, March.
    15. 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. Dean A. Shepherd & Andrew Zacharakis, 2000. "Structuring Family Business Succession: An Analysis of the Future Leader's Decision Making," Entrepreneurship Theory and Practice, , vol. 24(4), pages 25-39, July.
    2. van de Ven, Niels & Zeelenberg, Marcel, 2011. "Regret aversion and the reluctance to exchange lottery tickets," Journal of Economic Psychology, Elsevier, vol. 32(1), pages 194-200, February.
    3. Saral, Krista Jabs, 2012. "Speculation and demand reduction in English clock auctions with resale," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 416-431.
    4. Ronayne, David & Sgroi, Daniel & Tuckwell, Anthony, 2021. "Evaluating the sunk cost effect," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 318-327.
    5. Haizhong Wang & Hong Yuan & Xiaolin Li & Huaxi Li, 2019. "The impact of psychological identification with home-name stocks on investor behavior: an empirical and experimental investigation," Journal of the Academy of Marketing Science, Springer, vol. 47(6), pages 1109-1130, November.
    6. Christoph Bühren & Thorben C. Kundt, 2013. "Worker or Shirker – Who Evades More Taxes? A Real Effort Experiment," MAGKS Papers on Economics 201326, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    7. 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.
    8. Hauke Jelschen & Ulrich Schmidt, 2023. "Windfall gains and house money: The effects of endowment history and prior outcomes on risky decision–making," Journal of Risk and Uncertainty, Springer, vol. 66(3), pages 215-232, June.
    9. Ran Kivetz, 2003. "The Effects of Effort and Intrinsic Motivation on Risky Choice," Marketing Science, INFORMS, vol. 22(4), pages 477-502, December.
    10. Wei Qi & Xiumei Guo & Xia Wu & Dora Marinova & Jin Fan, 2018. "Do the sunk cost effect and cognitive dissonance increase risk perception? An empirical study in the context of city smog," Quality & Quantity: International Journal of Methodology, Springer, vol. 52(5), pages 2269-2289, September.
    11. 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).
    12. Zeelenberg, M. & van Dijk, W.W. & Manstead, A.S.R., 1998. "Reconsidering the relation between regret and responsibility," Other publications TiSEM fa17bcac-aab0-4f37-8183-5, Tilburg University, School of Economics and Management.
    13. Marcello Negrini & Arno Riedl & Matthias Wibral, 2020. "Still in Search of the Sunk Cost Bias," CESifo Working Paper Series 8623, CESifo.
    14. Haoyu Liu & Lifeng Yang & Duane T. Wegener, 2023. "Effects of labeling on risk taking in “leveling-up” decisions: ascending versus descending permutations and ending in terminal values," Marketing Letters, Springer, vol. 34(1), pages 125-138, March.
    15. Ronald Bosman & Frans Van Winden, 2010. "Global Risk, Investment and Emotions," Economica, London School of Economics and Political Science, vol. 77(307), pages 451-471, July.
    16. Giorgetta, Cinzia & Zeelenberg, Marcel & Ferlazzo, Fabio & D’Olimpio, Francesca, 2012. "Cultural variation in the role of responsibility in regret and disappointment: The Italian case," Journal of Economic Psychology, Elsevier, vol. 33(4), pages 726-737.
    17. Lee, Carmen & Kräussl, Roman & Lucas, André & Paas, Leo, 2010. "Why do investors sell losers? How adaptation to losses affects future capitulation decisions," CFS Working Paper Series 2010/23, Center for Financial Studies (CFS).
    18. Negrini, Marcello & Riedl, Arno & Wibral, Matthias, 2022. "Sunk cost in investment decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 1105-1135.
    19. Suliani Rover & Artur Filipe Ewald Wuerges & Eduardo Cardeal Tomazzia & José Alonso Borba, 2009. "Sunk Costs Effect: Does Theoretical Knowledge Affects Students’ Decision Process?," Brazilian Business Review, Fucape Business School, vol. 6(3), pages 232-248, September.
    20. Bogdan Dima & Laura Raisa MiloÅŸ, 2009. "Testing The Efficiency Market Hypothesis For The Romanian Stock Market," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(11), pages 1-41.
    21. Zeelenberg, Marcel & van Dijk, Wilco W. & Manstead, Antony S. R., 1998. "Reconsidering the Relation between Regret and Responsibility," Organizational Behavior and Human Decision Processes, Elsevier, vol. 74(3), pages 254-272, June.
    22. Erkan Kalayci & Ulkem Basdas, 2010. "Does the prospect theory also hold for power traders? Empirical evidence from a Swiss energy company," Review of Financial Economics, John Wiley & Sons, vol. 19(1), pages 38-45, January.
    23. 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.
    24. 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.
    25. 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.

    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. Dean A. Shepherd & Andrew Zacharakis, 2000. "Structuring Family Business Succession: An Analysis of the Future Leader's Decision Making," Entrepreneurship Theory and Practice, , vol. 24(4), pages 25-39, July.
    2. Hoelzl, Erik & Loewenstein, George, 2005. "Wearing out your shoes to prevent someone else from stepping into them: Anticipated regret and social takeover in sequential decisions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 98(1), pages 15-27, September.
    3. Reb, Jochen & Connolly, Terry, 2009. "Myopic regret avoidance: Feedback avoidance and learning in repeated decision making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 109(2), pages 182-189, July.
    4. Sugden, Robert & Wang, Mengjie & Zizzo, Daniel John, 2019. "Take it or leave it: Experimental evidence on the effect of time-limited offers on consumer behaviour," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 1-23.
    5. van de Calseyde, Philippe P.F.M. & Zeelenberg, Marcel & Evers, Ellen R.K., 2018. "The impact of doubt on the experience of regret," Organizational Behavior and Human Decision Processes, Elsevier, vol. 149(C), pages 97-110.
    6. 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.
    7. Zeelenberg, M., 1999. "Anticipated regret, expected feedback and behavioral decision-making," Other publications TiSEM 38371d1b-31fd-45b0-860f-b, Tilburg University, School of Economics and Management.
    8. Zeelenberg, Marcel & van Dijk, Wilco W. & van der Pligt, Joop & Manstead, Antony S. R. & van Empelen, Pepijn & Reinderman, Dimitri, 1998. "Emotional Reactions to the Outcomes of Decisions: The Role of Counterfactual Thought in the Experience of Regret and Disappointment," Organizational Behavior and Human Decision Processes, Elsevier, vol. 75(2), pages 117-141, August.
    9. Zeelenberg, M. & van Dijk, W.W. & van der Pligt, J. & Manstead, A.S.R. & van Empelen, P. & Reinderman, D., 1998. "Emotional reactions to the outcomes of decision : The role of counterfactual thought in the experience of regret," Other publications TiSEM eafc28f9-18d6-4b76-b70f-3, Tilburg University, School of Economics and Management.
    10. Zeelenberg, Marcel & Beattie, Jane, 1997. "Consequences of Regret Aversion 2: Additional Evidence for Effects of Feedback on Decision Making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 72(1), pages 63-78, October.
    11. Zeelenberg, Marcel & Pieters, Rik, 2004. "Consequences of regret aversion in real life: The case of the Dutch postcode lottery," Organizational Behavior and Human Decision Processes, Elsevier, vol. 93(2), pages 155-168, March.
    12. Krähmer, Daniel & Stone, Rebecca, 2005. "Regret in Dynamic Decision Problems," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 71, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    13. Yuval Rottenstreich & Alex Markle & Johannes Müller-Trede, 2023. "Risky Sure Things," Management Science, INFORMS, vol. 69(8), pages 4707-4720, August.
    14. Ulrich Schmidt & Stefan Traub, 2009. "An Experimental Investigation of the Disparity Between WTA and WTP for Lotteries," Theory and Decision, Springer, vol. 66(3), pages 229-262, March.
    15. Zeelenberg, M. & van Dijk, W.W. & Manstead, A.S.R., 1998. "Reconsidering the relation between regret and responsibility," Other publications TiSEM fa17bcac-aab0-4f37-8183-5, Tilburg University, School of Economics and Management.
    16. Bonanno, Giacomo, 2022. "Minimax regret with imperfect ex-post knowledge of the state," Research in Economics, Elsevier, vol. 76(4), pages 403-412.
    17. L. Robin Keller & Yitong Wang, 2017. "Information Presentation in Decision and Risk Analysis: Answered, Partly Answered, and Unanswered Questions," Risk Analysis, John Wiley & Sons, vol. 37(6), pages 1132-1145, June.
    18. Syed Aliya Zahera & Rohit Bansal, 2018. "Do investors exhibit behavioral biases in investment decision making? A systematic review," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 10(2), pages 210-251, May.
    19. Zeelenberg, Marcel & van Dijk, Wilco W. & Manstead, Antony S. R., 1998. "Reconsidering the Relation between Regret and Responsibility," Organizational Behavior and Human Decision Processes, Elsevier, vol. 74(3), pages 254-272, June.
    20. Jeeva Somasundaram & Enrico Diecidue, 2017. "Regret theory and risk attitudes," Journal of Risk and Uncertainty, Springer, vol. 55(2), pages 147-175, December.

    More about this item

    Statistics

    Access and download statistics

    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:joepsy:v:18:y:1997:i:6:p:677-691. 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: http://www.elsevier.com/locate/joep .

    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.