More about the sunk cost fallacy on this website.įind the latest research on the sunk cost fallacy. Research suggests that rats, mice and humans are all sensitive to sunk costs after they have made the decision to pursue a reward (Sweis et al., 2018) and that a capacity for cognitive reflection can reduce sunk cost behavior (Ronayne et al., 2021). Track citations for all items by RSS feed. Because coverage of each of the variables in this figure is. Bibliographic data for series maintained by Catherine Liu ( ). Decisions about human resource policies affect levels of employee. Organizational Behavior and Human Decision Processes. If the costs outweigh the benefits, the extra costs incurred (inconvenience, time or even money) are held in a different mental account than the one associated with the ticket transaction (Thaler, 1999). Organizational behavior is resistant to change due to human cognitive processes and. 117-136 Show abstract We examine how organizations of different types nonprofit, for-profit, and public engage in consumer-benefiting misconduct (CBM) by examining which patients benefit from hospitals of the three types gaming the market for liver transplants. Similarly, a person may have a $20 ticket to a concert and then drive for hours through a blizzard, just because she feels that she has to attend due to having made the initial investment. Organizational Behavior and Human Decision Processes, Volume 166, 2021, pp. An ISSN is an 8-digit code used to identify newspapers, journals, magazines and periodicals of all kinds and on all mediaprint and electronic. This fallacy, which is related to loss aversion and status quo bias, can also be viewed as bias resulting from an ongoing commitment.įor example, individuals sometimes order too much food and then over-eat just to “get their money’s worth”. ISSN The ISSN of Organizational Behavior and Human Decision Processes is 0749-5978. Individuals commit the sunk cost fallacy when they continue a behavior or endeavor as a result of previously invested resources (time, money or effort) (Arkes & Blumer, 1985). It posits that individual behavior is driven by behavior intentions, where behavior intentions are a function of three determinants: an individual’s attitude toward behavior, subjective norms, and perceived behavioral control (Ajzen, 1991).
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