The impact of childhood environments on the sunk-cost fallacy Article

Jhang, J, Lee, DC, Park, J et al. (2023). The impact of childhood environments on the sunk-cost fallacy . PSYCHOLOGY & MARKETING, 40(3), 531-541. 10.1002/mar.21750

cited authors

  • Jhang, J; Lee, DC; Park, J; Lee, J; Kim, J

authors

abstract

  • The sunk-cost fallacy is a well-documented cognitive bias in the decision-making literature. Although the emerging literature on childhood socioeconomic status suggests that early-life environments shape individuals'┬ádecision strategies and have a long-lasting impact on their decisions, little is known about the impact of childhood socioeconomic status on the sunk-cost fallacy. Using two different scenarios and an actual choice task, we provide converging evidence that individuals who grew up in resource-scarce environments (those with lower childhood socioeconomic status) are reluctant to abandon inferior choices merely because they have already invested substantial resources in them, resulting in the sunk-cost fallacy. This fallacy occurs because individuals with lower childhood socioeconomic status tend to perceive the loss of their prior investments as more wasteful than those with higher childhood socioeconomic status.

publication date

  • March 1, 2023

published in

Digital Object Identifier (DOI)

start page

  • 531

end page

  • 541

volume

  • 40

issue

  • 3