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The Determinants of Sunk Cost Sensitivity In Students

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  • Jeffrey Carpenter

    ()

  • Peter Hans Matthews

    ()

  • Ashley D. Brown

    ()

Abstract

We conduct a vignette study of the propensity to commit the sunk cost fallacy with 106 undergradu-ates. Our contribution is to examine the socio-demographic determinants of "sunk cost sensitivity." The likelihood of commitment is found to be positively correlated with some ethnicities, negatively correlated with both family income and high personal income, negatively correlated with intermediate levels of schooling, and more or less uncorrelated with standard measures of educational ability and performance like GPAs and SAT scores.

Suggested Citation

  • Jeffrey Carpenter & Peter Hans Matthews & Ashley D. Brown, 2005. "The Determinants of Sunk Cost Sensitivity In Students," Middlebury College Working Paper Series 0524, Middlebury College, Department of Economics.
  • Handle: RePEc:mdl:mdlpap:0524
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    File URL: http://www.middlebury.edu/services/econ/repec/mdl/ancoec/0524.pdf
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    1. 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.
    2. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
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