It's no longer “me”: low past-self-continuity reduces the sunk-cost bias

Schanbacher, A D, Gurdamar-Okutur, N and Faro, D (2021) It's no longer “me”: low past-self-continuity reduces the sunk-cost bias. Journal of Experimental Social Psychology, 95 (July). ISSN 0022-1031

Abstract

The sunk-cost bias describes the tendency to continue an inferior course of action because one has invested significant, irrecoverable resources in it in the past. It can lead individuals to make decisions that are suboptimal for their welfare. Across five experiments (N = 3197), we investigate whether the tendency of individuals to display sunk-cost bias is influenced by their sense of psychological connectedness to their past self that incurred the initial cost, or past-self-continuity. Studies 1–3 show evidence that individuals with low (versus high) past-self-continuity are less likely to display sunk-cost bias because they anticipate less negative feelings associated with abandoning substantial investments. Study 4, which was conducted under Registered Report format, provides partial support for this theory. We discuss potential complementary mechanisms, as well as implications of our findings for negative self-focused emotions and for decision biases routed in overweighting of or overcommitment to past actions.