Short reportThe sunk-time effect: effect of time invested and reward magnitude using within-subject design
Introduction
In behavior analysis and behavioral economics, persistence in a course of action is said to be affected by prior investments (e.g. Garland and Newport, 1991; Staw, 1981; Thaler, 1981). The concept of sunk cost has been used by some authors to refer to this phenomenon (Arkes and Blumer, 1985; Garland, 1990; Kacelnik and Marsh, 2002), and it has been tested experimentally in different studies. For example, Arkes and Blumer (1985, in Experiment 1) asked their participants to imagine that, several weeks after buying a $100 ticket to spend a weekend in Michigan, they bought another one to Wisconsin for $50. Then, they noticed that both trips were scheduled for the same weekend and faced the choice between going to Wisconsin (the place they would rather go to) or taking the trip to Michigan (after all, they had invested more money in that ticket). Fifty-four percent of the participants in their study chose to go to Michigan, which suggests that prior investments could change a course of action, favoring alternatives that initially were less preferred. In other words, even when prior investments are nonrefundable, they seem to affect future behavior.
Research on sunk cost effect has focused mainly on procedures in which monetary costs are involved. Relatively few studies have evaluated the effect of sunk investments when temporal costs are involved (e.g., Fantino et al., 2008; Navarro and Fantino, 2009; Soman, 2001). Soman (2001) evaluated whether the sunk cost effect brought about by past investments of time was similar to those when investments were expressed as monetary amounts. Soman (2001) reported that the sunk cost effect was not found with time investments but confirmed the sunk cost effect in the monetary domain. In a subsequent study, Navarro and Fantino (2009) carried out seven experiments in which they evaluated the effect of time investments and personal responsibility (i.e. whether the participants or another person was responsible for a project) on persistence in a course of action using a group design. Navarro and Fantino (2009) used an established protocol of sunk cost studies that consisted of questionnaires with hypothetical situations in which participants were asked to imagine that they were leaders of a group that worked in a mine and that, after some days of working, they found a vein of copper. However, a thick wall of quartz was covering the copper and it would take 10 more days to dig through the wall and collect a smaller amount of copper than expected. Participants faced the choice between keep digging 10 more days or leaving the mine. In the first three experiments of their study, Navarro and Fantino (2009) manipulated sunk time among groups. In each experiment, there was a group in which no time had been invested (0 days) and two groups in which a time investment (60 days) had been made. These two groups differed in quality of time. Depending on the experiment, in each of these two groups, different levels of effort (Experiment 1), enjoyment (Experiment 2) and difficulty of the future work (Experiment 3) were tested. A significantly higher percentage of participants continued in the course of action (digging) when some time had already been invested. Similar results were observed regardless of whether the time invested was aversive or enjoyable, of prospective effort, and framing (individual vs. group, Experiment 4). Experiments 5–7 also found a sunk time effect and supported the idea that personal responsibility for voluntarily initiating a project interacts with time invested.
Navarro and Fantino’s study illustrates one of the many effects time may have on preference. Another extensively studied effect is delay discounting. However, whereas time spans are retrospective in sunk cost studies (i.e., they precede the occurrence of an event and act like an investment), they are prospective in delay discounting studies (i.e., they follow behavior and act as a consequence). Additionally, in sunk cost studies the effect of prior time investments are evaluated by determining the percentage of participants that persist in a course of action, while in delay discounting studies adjusting procedures are used to determine the change in the value of an alternative as a function of prospective delays.
Adjusting procedures consist of a series of trials in which participants choose between a smaller immediate or a larger delayed amount of money. From trial to trial, the amount of the immediate alternative is adjusted until participants show indifference between the two outcomes. With adjusting procedures, we can quantitatively assess the effect of time on the value of an alternative and derive mathematical predictions which, in turn, may provide more precise and unambiguous information about choice in such situations. They also allow for the observation of how time interacts with other variables. For example, the subjective value of alternatives associated with larger amounts of money decreases more slowly as a function of time than the subjective value of alternatives associated with smaller amounts, a phenomenon known as the magnitude effect (Benzion et al., 1988; Grace and McLean, 2005; Green et al., 1997; Myerson and Green, 1995). As such, in this paper, we attempted to extend the findings of Navarro and Fantino (2009) about sunk time using an adjusting choice procedure which has been fruitful on research about decision making and choice in similar fields (e.g. delay discounting). This will permit us to evaluate mathematically the changes in value of an outcome associated with the time invested. Additionally, the present study evaluates the effect of time investments using a within-subject design with two different magnitudes to explore whether the magnitude effect is observed in a sunk cost scenario. The initial hypothesis is that time investments will proportionally increase the value of an item. Additionally, based on delay discounting studies, we expect smaller increases in the value of items associated with larger amounts than those associated with smaller amounts.
Section snippets
Participants
Forty-six undergraduate students (9 men and 37 women) from introductory psychology classes were invited to participate. They were given extra credit for their participation. The mean age of participants was 22 ± 3.4 years. They were told that their participation was voluntary and that the purpose of the study was to examine preference, not intelligence or personality.
Materials and procedure
Participants were tested all at once in a classroom. Each participant received two questionnaires in which they had to choose
Conclusions
The present study investigated the sunk cost effect of invested time with an adjusting-amount procedure and the magnitude effect in a sunk time scenario. The subjective value of the outcome (guitar) increased as time invested increased in both conditions of magnitude. This effect was observed in a within-subject design in contrast with previous studies that employed between-group designs (e.g., Navarro and Fantino, 2009). It should be stressed that, whereas the effects of sunk costs have
Authorship statement
All persons who meet authorship criteria are listed as authors, and all authors certify that they have participated sufficiently in the work to take public responsibility for the content, including participation in the concept, design, analysis, writing, or revision of the manuscript. Furthermore, each author certifies that this material or similar material has not been and will not be submitted to or published in any other publication before its appearance in the Hong Kong Journal of
Authorship contributions
Please indicate the specific contributions made by each author (list the authors’ initials followed by their surnames, e.g., Y.L. Cheung). The name of each author must appear at least once in each of the three categories below.
Category 1 Conception and design of study:
M.C. Cisneros., L.H. Silva., C. Torres.
acquisition of data:
M.C. Cisneros, L.H. Silva,
analysis and/or interpretation of data:
M.C. Cisneros, L.H. Silva., E., Hernandez., C. Torres.
Category 2 Drafting the manuscript:
M.C. Cisneros,
Acknowledgements
We would like to thank the research group from the Laboratory of the Experimental Analysis of Behavior in Brasília (Brazil) for their support and comments in the construction of the questionnaires. We would also like to extend our deepest gratitude to Cristiano Dos Santos for his assistance in developing this manuscript. Economic support for research and manuscript preparation were granted by National Research System (SNI-CONACyT).
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