Abstract

The present research examined whether the magnitude of the sunk cost effect would be different in two judgment settings: choice for self and advice for others. The sunk cost effect refers to the tendency to continue to invest in a failing project just because they made prior investment in the project. Study 1 showed that the sunk cost was more likely when giving advice to others compared to when making a choice for self. Study 2 replicated the results of study 1, such that the decision to honor sunk cost was more favorably evaluated when it was made for others than for self. Study 3 demonstrated that such a choice-advice difference in the sunk cost was in part due to a motivational factor. Namely, when participants were made to be responsible for their advices, they were less likely to display the sunk cost effect. Some implications were discussed.