Although the sunk‐cost effect is a well‐documented psychological phenomenon in monetary investments, existing literature investigating behavioral investments (e.g., time, effort) has not replicated this effect except when such investments relate to monetary values. The current explanation for this discrepancy proposes that purely behavioral sunk‐cost effects are unlikely to be observed because they are difficult to book, track, and balance in a mental account. Conversely, we argue that, through an effort‐justification mechanism, people account for the amount of behavioral resources (...) invested when selecting an alternative, in which case they may fall prey to purely behavioral sunk‐cost effects. The results of two experiments support this prediction. Because many decisions involve behavioral investments, behavioral sunk‐cost effects should be pervasive psychological phenomena. (shrink)

Business and Economic textbooks warn against committing the Sunk Cost Fallacy: you, rationally, shouldn't let unrecoverable costs influence your current decisions. In this paper, I argue that this isn't, in general, correct. Sometimes it's perfectly reasonable to wish to carry on with a project because of the resources you've already sunk into it. The reason? Given that we're social creatures, it's not unreasonable to care about wanting to act in such a way so that a plausible story (...) can be told about you according to which your diachronic behavior doesn't reveal that you've suffered, what I will call, diachronic misfortune. Acting so as to hide that you've suffered diachronic misfortune involves striving to make yourself easily understood while disguising any shortcomings that might damage your reputation as a desirable teammate. And making yourself easily understood to others while hiding your flaws will, sometimes, put pressure on you to honor sunk costs. (shrink)

The sunk cost fallacy is a well-established phenomenon where decision makers continue to commit resources, or escalate commitment, because of previously committed efforts, even when they have knowledge that their returns will not outweigh their investment. Most research on the sunk cost fallacy is done using hypothetical scenarios where participants make a single decision to continue with a project or to abandon it. This paradigm has several limitations and has resulted in a relatively limited understanding sunk cost (...) behavior. To address some of these limitations, we created a dynamic repeated choice paradigm where sunk costs are learned over time and opportunity costs are explicit. Over three experiments we show that the sunk cost fallacy depends on the relative a priori importance of the goal being invested in. We observed escalation of commitment only when the sunk cost domain is more important than alternatives, and participants showed de-escalation of commitment to the sunk costs domain otherwise. (shrink)

This project tackles the problem of analyzing a specific form of reasoning called ‘sunk costs’ in economics and ‘argument from waste’ in argumentation theory. The project is to build a normative structure representing the form of the argument, and then to apply this normative structure to actual cases in which the sunk costs argument has been used. The method is partly structural and partly empirical. The empirical part is carried out through the analysis of case studies of (...) the sunk costs argument found in business decision-making, as well as other areas like medical decision-making and everyday conversational argumentation. The structural part is carried out by using existing methods and techniques from argumentation theory, like argumentation schemes. The project has three especially significant findings. First, the sunk costs argument is not always fallacious, and in many cases it can be seen to be a rational precommitment strategy. Second, a formal model of argumentation, called practical reasoning, can be constructed that helps a rational critic to judge which sunk costs arguments are fallacious and which are not. Third, this formal model represents an alternative model of rationality to the cost-benefit model based on Bayesian calculation of probabilities. This alternative model is called the argumentation model, and it is based on interpersonal reasoning in dialogue as the model of rational thinking. This model in turn is based on the underlying notion of commitment in dialogue. (shrink)

Many find it reasonable to take our past actions into account when making choices for the future. In this paper, I address two important issues regarding taking past investments into account in prudential deliberation. The first is the charge that doing so commits the fallacy of honoring sunk costs. I argue that while it is indeed irrational to care about sunk costs, past investments are not sunk costs when we can change their teleological significance, (...) roughly their contribution to our excellence as temporally extended, reasons-responsive, and goal-directed agents. I suggest some general principles for evaluating such significance. Second, it’s a live issue whether we should care about the fate of our past projects, even if we can now affect it. I reject Dale Dorsey’s recent answer, and argue that the puzzle he addresses turns out to be merely apparent, if we take seriously the fact that we are temporally extended. (shrink)

The problem of moral sunk costs pervades decision-making with respect to war. In the terms of just war theory, it may seem that incurring a large moral cost results in permissiveness: if a just goal may be reached at a small cost beyond that which was deemed proportionate at the outset of war, how can it be reasonable to require cessation? On this view, moral costs already expended could have major implications for the ethics of conflict termination. (...) Discussion of sunk costs in moral theorizing about war has settled into four camps: Quota, Prospect, Addition, and Discount. In this paper, I offer a mathematical model that articulates each of these views. The purpose of the mathematisation is threefold. First, to unify the sunk costs problem. Second, to show that these views differ in the nature of their justifications: some are justified qualitatively and others quantitatively. Third, to clarify the differential force of qualitative and quantitative critiques of these four views. (shrink)

Decision theorists generally object to “honoring sunk costs” – that is, treating the fact that some cost has been incurred in the past as a reason for action, apart from the consideration of expected consequences. This paper critiques the doctrine that sunk costs should never be honored on three levels. As background, the rationale for the doctrine is explained. Then it is shown that if it is always irrational to honor sunk costs, then other (...) common and uncontroversial practices are also irrational. Second, it is argued that there is no satisfactory way to make a distinction between the two kinds of cases. Third, a proposal is developed which would explain how it could be rational, under certain circumstances, to honor sunk costs. (shrink)

This chapter focuses on one of the common fallacies in Western philosophy called 'sunk cost'. In economics, a sunk cost is an investment that can never be recovered. Prime examples include money spent on research and development or advertising for a product. However, there is a way to think of cost in terms of time, energy, and even emotion. The way to avoid this fallacy is to not allow the fear of losing what was already invested in something (...) to influence one's rational, objective decision about a present or future investment. In Eric Nielsen's words, when making any decision, economic or otherwise, it “makes no sense to factor in sunk costs precisely because they are sunk; no present action can change them. No matter what happens, the sunk costs are always there”. (shrink)

If you are more likely to continue a course of action in virtue of having previously invested in that course of action, then you tend to honor sunk costs. It is widely thought both that (i) individuals often do give some weight to sunk costs in their decision-making and that (ii) it is irrational for them to do so. In this paper I attempt to cast doubt on the conventional wisdom about sunk costs, understood (...) as the conjunction of these two claims. (shrink)

Suppose that you are trying to pursue a morally worthy goal, but cannot do so without incurring some moral costs. At the outset, you believed that achieving your goal was worth no more than a given moral cost. And suppose that, time having passed, you have wrought only harm and injustice, without advancing your cause. You can now reflect on whether to continue. Your goal is within reach. What's more, you believe you can achieve it by incurring—from this point (...) forward—no more cost than it warranted at the outset. If you now succeed, the total cost will exceed the upper bound marked at the beginning. But the additional cost from this point is below that upper bound. And the good you will achieve is undiminished. How do the moral costs you have already inflicted bear upon your decision now? (shrink)

The sunk cost cognitive bias, or sunk cost fallacy, is a human tendency to continue with: an investment, make a decision, business, couple or project based on the resources that have been invested, instead of making a current evaluation of the results. future benefits and costs. The objective of the research was to analyze the impact of sunk cost cognitive bias on customer decisions and its application in neuromarketing strategies. The specific objectives were: (i) Evaluate how (...) sunk cost influences the perception of the value of products or services. (ii) Identify marketing strategies that exploit the sunk cost bias. (iii) Propose strategies to apply the sunk cost bias in marketing. The results show that the sunk cost bias significantly influences the perception of the value of products and services, affecting purchasing decisions, depending on the educational level, gender, and income level that influence the continuity in the use of products and services. due to previous investment of time or money; When purchasing expensive items customers feel obligated to continue using paid more even if it is not useful and used in full. The continuity in prepaid subscriptions, the perception of discounts for large quantities as a way to make better use of money, the probability of participating in loyalty programs for the accumulated rewards, the preference for payments and flexible cancellation, create a valuable perception of products they have previously invested in, the preference for repairing expensive items, and the perception of loss from a previous investment. It is concluded that the sunk cost cognitive bias significantly influences the decisions and behavior of a vast majority of customers, and how companies can use this information to design effective marketing campaigns. (shrink)

Optimal foraging theory has been criticized for underestimating patch exploitation time. However, proper modeling of costs not only answers these criticisms, but it also explains apparently irrational behaviors like the sunk-cost effect. When a forager is sure to experience high initial costs repeatedly, the forager should devote more time to exploitation than searching in order to minimize the accumulation of said costs. Thus, increased recognition or reconnaissance costs lead to increased exploitation times in order to (...) reduce the frequency of future costs, and this result can be used to explain paradoxical human preference for higher costs. In fact, this result also provides an explanation for how continuing a very costly task indefinitely provides the optimal long-term rate of gain; the entry cost of each new task is so great that the forager avoids ever returning to search. In general, apparently irrational decisions may be optimal when considering the lifetime of a forager within a larger system. (shrink)

INCONTINENCE, HONOURING SUNK COSTS AND RATIONALITY According to a basic principle of rationality, the decision to engage in a course of action should be determined solely by the analysis of its consequences. Thus, considerations associated with previous use of resources should have no bearing on an agent’s decision-making process. Frequently, however, agents persist carrying on an activity they themselves judge to be nonoptimal under the circumstances because they have already allocated resources to that activity. When this is the (...) case, agents are said to be honouring sunk costs. Honouring sunk costs is thus typically viewed as irrational economic behaviour. Two striking findings of the psychological literature on the sunk cost effect are that it is, in general, not lessened by having taken previously courses in economics, and that agents who did take such courses and that do honour sunk costs seem to be frequently aware of a cognitive dissonance in their behaviour. Davidson’s account of the possibility conditions of incontinent action renders continent action materially unfeasible. The very idea of incontinent action becomes thus a hollow one. I’ll present an alternative description of these possibility conditions that renders continent action materially feasible, and both, continent and incontinent action, cognitively plausible. In a nutshell, my proposal rests upon the drawing of an essential cognitive contrast between explicit processes of deliberative reasoning and lower level heuristic procedures. I conclude the paper arguing that my redescription of incontinent action accounts for the above mentioned cognitive dissonance effect better than the alternatives and that viewing at least an important subset of behaviours of honouring sunk costs as incontinent actions will enable us to consider them as peculiar manifestations of a more general and meaningful pattern in human behaviour. (shrink)

In the WebSurf task, humans forage for videos paying costs in terms of wait times on a time-limited task. A variant of the task in which demands during the wait time were manipulated revealed the role of attention in susceptibility to sunk costs. Consistent with parallel tasks in rodents, previous studies have found that humans preferred shorter delays, but waited longer for more preferred videos, suggesting that they were treating the delays economically. In an Amazon Mechanical Turk (...) sample, we replicated these predicted economic behaviors for a majority of participants. In the lab, participants showed susceptibility to sunk costs in this task, basing their decisions in part on time they have already waited, which we also observed in the subset of the mTurk sample that behaved economically. In another version of the task, we added an attention check to the wait phase of the delay. While that attention check further increased the proportion of subjects with predicted economic behaviors, it also removed the susceptibility to sunk costs. These findings have important implications for understanding how cognitive processes, such as the deployment of attention, are key to driving re-evaluation and susceptibility to sunk costs. (shrink)

The all too common sunk cost effect is apparent when an investor influenced by what has been spent already persists in a venture, committing further resources or foregoing more profitable opportunities, when the economically rational action is to quit. Less common but arguably just as much a sunk cost effect is the mistake of giving up on a failed or failing venture too readily, sometimes out of nothing but pique at what has been lost, or perhaps through the (...) more subtle psychological forces posited by Kahneman, Tversky, Thaler and others within prospect theory and related work on ``mental budgeting''. Two case examples are considered, wherein decision makers dissatisfied with the results of their investments, and having lost money, appear to compound their losses by selling out at prices less than their own estimates of the remaining financial worth of the failed assets. These decisions are evaluated from the perspectives of both behavioral and prescriptive economics, and are found to have possible explanations in both. Their prescriptive rationale assumes a portfolio theory of investment decisions, and is demonstrated within both expected utility (economics) and mean-variance (finance) frameworks. (shrink)

The present study describes the mechanism of need regulation, which accompanies the so-called “biased” decisions. We hypothesized an unconscious urge for psychological need satisfaction as the trigger for cognitive biases. In an experimental study (N = 106), participants had the opportunity to win money in a functionality test. In the test, they could either use the solution they had developed (sunk cost) or an alternative solution that offered a higher probability of winning. The selection of the sunk-cost option (...) was the most chosen option, supporting the hypothesis of this study. The reason behind the majority of participants choosing the sunk-cost option seemed to be the satisfaction of psychological needs, despite a reduced chance of winning money. An intervention, which aimed at triggering self-reflection, had no impact on the decision. The findings of this study contribute to the discussion on the reasons for cognitive biases and their formation in the human mind. Moreover, it discusses the application of the label “irrational” for biased decisions and proposes reasons for instrumental rationality, which exist at an unconscious, need-regulative level. (shrink)

Cunha and Caldieraro (2009) investigated whether sunk-cost effects, which are well documented in hypothetical situations involving monetary investments, also occur in choice situations with purely behavioral investments. Their results suggest that decision makers indeed fall prey to behavioral sunk-cost effects under certain circumstances. I have been unable to replicate their pattern of results in three separate investigations. In these studies, I attempted to recover the effect using two other behavioral effort manipulations in addition to the manipulation used by (...) Cunha and Caldieraro. This failure to replicate the pattern of results calls into question the robustness of the initial findings. (shrink)

There is growing interest in whether and how sunk-cost effects for purely behavioral investments occur. In this article, we further discuss Cunha and Caldieraro’s (2009) Behavioral Investment Sunk Cost (BISC) model and reconcile Otto’s (2010) results with the BISC model predictions. We also report new data from two unpublished experiments that are consistent with the BISC model, and we discuss the conditions under which purely behavioral sunk-cost effects are likely to be observed.

Cognitive Science, Volume 45, Issue 11, November 2021.

Only in recent years have developmental psychologists begun advocating and exploring dual-process theories and their applicability to cognitive development. In this paper, a dual-process model of developments in two processing systems—an “analytic” and an “experiential” system—is discussed. We emphasise the importance of “metacognitive intercession” and developments in this ability to override experiential processing. In each of two studies of sunk cost decisions, age-related developments in normative decisions were observed, as were declines in the use of a “waste not” heuristic. (...) In the second study, children and adolescents were presented with arguments for normative and non-normative sunk cost decisions. Following argument evaluation, participants were re-presented the original problems and a set of novel, transfer problems. Results indicated that post-argument improvements were most apparent during adolescence. Age-related improvements were most noticeable on the transfer problems. In general, the findings suggest that the ability to metacognitively intercede (i.e., reflect on arguments; inhibit experientially produced responses) emerges towards middle adolescence. However, even by the end of adolescence, in the absence of significant contextual cues and motivation, this ability is infrequently utilised. (shrink)

It is a commonplace in economics that we should disregard sunk costs. The sunk cost effect might be widespread, goes the conventional wisdom, but we would be better off if we could rid ourselves of it. In this paper, I argue against the orthodoxy by showing that the sunk cost effect is often beneficial. Drawing on discussions of related topics in dynamic choice theory, I show that, in a range of cases, being disposed to honor (...) class='Hi'>sunk costs allows an agent to mimic a resolute chooser, someone who adopts the best plan at the outset of a decision problem and sticks with it, even when resoluteness is unfeasible. I discuss several kinds of cases in which honoring sunk costs coincides with resolute choice. (shrink)

Ratio Juris, Volume 35, Issue 1, Page 21-29, March 2022.

Many philosophers hold that the achievement of one's goals can contribute to one's welfare apart from whatever independent contributions that the objects of those goals or the processes by which they are achieved make. Call this the Achievement View, and call those who accept it achievementists. In this paper, I argue that achievementists should accept both that one factor that affects how much the achievement of a goal contributes to one’s welfare is the amount that one has invested in that (...) goal and that the amount that one has invested in a goal is a function of how much one has personally sacrificed for its sake, not a function of how much effort one has put into achieving it. So I will, contrary to at least one achievementist, be arguing against the view that the greater the amount of productive effort that goes into achieving a goal, the more its achievement contributes to one's welfare. Furthermore, I argue that the reason that the achievement of those goals for which one has personally sacrificed matters more to one’s welfare is that, in general, the redemption of one's self-sacrifices in itself contributes to one’s welfare. Lastly, I argue that the view that the redemption of one's self-sacrifices in itself contributes to one's welfare is plausible independent of whether or not we find the Achievement View plausible. We should accept this view so as to account both for the Shape of a Life Phenomenon and for the rationality of honoring "sunk costs.". (shrink)

How should deontologists approach decision-making under uncertainty, for an iterated decision problem? In this paper I explore the shortcomings of a simple expected value approach, using a novel example to raise questions about attitudes to risk, the moral significance of tiny probabilities, the independent moral reasons against imposing risks, the morality of sunk costs, and the role of agent-relativity in iterated decision problems.

Important moral dilemmas arise in the context of what I have called jus terminatio and Darrel Moellendorf has called jus ex bello—the norms governing the termination of war. I discuss three dilemmas, showing how they also illuminate proportionality and jus ad bellum: morally accounting for new costs that arise during the course of a war; two variants of the “sunk-cost dilemma” in which an agent is permitted to contribute to a project that is all things considered morally unjust, (...) when that project is morally justified on a forward-looking basis; and the problem of moral hazard in peace negotiations. (shrink)

The Shape-of-a-Life phenomenon is widely recognized by philosophers of well-being: an upward life trajectory seems better than its downward equivalent if the sum of momentary well-being is held fixed. But what if we hold fixed the sum of momentary well-being in an upward trajectory, are certain ways to improve from the bad times better than the others? Velleman suggests that a redemptive trajectory is better than a bare upward trajectory. In this paper, I elaborate this proposal by developing a mediating (...) factor account of prudential redemption. I argue that, in redemptive trajectories, there is a mediating factor that bears certain relations with the negative and the positive events respectively, one that does not necessarily appear in bare upward trajectories. Prudential redemption, compared to mere improvement, can enhance a person’s lifetime well-being because a redeemed event is made less bad by virtue of the mediating factor. This result has implications for making decisions in the face of equally good options and for evaluating the rationality of honoring sunk costs. (shrink)

This study examines how the reference-point effect and sunk-cost fallacy interact with stakeholder theory and influence how investors evaluate corporate social performance. We propose that ex-ante (pre-IPO) corporate social performance influences ex-post (post-IPO) perceived riskiness and that this relationship is U-shaped. We also evaluate how CEO duality and company age moderate this U-shaped relationship. Using young and newly public entrepreneurial firms in China, and focusing on stock returns in the secondary market, empirical results and robustness tests provide strong support (...) for our hypotheses. (shrink)

A rise of academic capitalism over the past four decades has been well documented within many research-intensive universities. Largely missing, however, are in-depth studies of how particularly situated academic groups manage the uncertainties that come with intermittent and fickle commercial funding streams in their daily research practice and problem choice. To capture the strategies scientists adopt under these conditions, this article provides an ethnographically detailed (and true) story about how a single project in Artificial Intelligence grew over several years from (...) a peripheral idea to the very center of an academic lab’s commercial portfolio. The analysis theorizes an epistemic form—nimble knowledge production—and documents three of its lab-level features: 1) rapid prototyping to keep sunk costs low, 2) shared search for “real world problems” rather than “theoretical” ones, and 3) nimble commitment to research problem choice. While similar forms of academic knowledge transfer have been lauded as “mode 2,” “innovative,” or “hybrid” for initiating cross-institutional collaboration and pushing science beyond disciplinary silos, this case suggests it can rely on fleeting attention to problems resistant to a quick fix. (shrink)

This paper develops a model of individual decision-making under bounded rationality in which discretionary cognitive adjustment creates a durable stock that complements choice of action. While it increases utility, adjustment also entails a cost, because focusing attention optimally is effortful and mental resources are scarce. Associated behavioral phenomena are categorized based on whether the operative motivation in adjusting is forward-looking utility maximization or justification of prior action. The theory is in line with prior conceptions of cognitive dissonance, but also offers (...) a more empirically consistent explanation of the endowment effect, persuasive advertising, and sunk-cost effects than existing accounts. (shrink)

The aim of this study was to initiate the exploration of debiasing methods applicable in real-life settings for achieving lasting improvement in decision making competence regarding multiple decision biases. Here, we tested the potentials of the analogical encoding method for decision debiasing. The advantage of this method is that it can foster the transfer from learning abstract principles to improving behavioral performance. For the purpose of the study, we devised an analogical debiasing technique for 10 biases (covariation detection, insensitivity to (...) sample size, base rate neglect, regression to the mean, outcome bias, sunk cost fallacy, framing effect, anchoring bias, overconfidence bias, planning fallacy) and assessed the susceptibility of the participants ( N = 154) to these biases before and 4 weeks after the training. We also compared the effect of the analogical training to the effect of ‘awareness training’ and a ‘no-training’ control group. Results suggested improved performance of the analogical training group only on tasks where the violations of statistical principles are measured. The interpretation of these findings require further investigation, yet it is possible that analogical training may be the most effective in the case of learning abstract concepts, such as statistical principles, which are otherwise difficult to master. The study encourages a systematic research of debiasing trainings and the development of intervention assessment methods to measure the endurance of behavior change in decision debiasing. (shrink)

This article aims to present regret, an emotion to which sociologists so far have paid little attention, as having great sociological significance. First, it reviews recent research in social psychology and economics which cast anticipated regret as playing a major role in human decision-making. Second, it suggests a regret-based interpretation of the sunk-cost fallacy. Such an interpretation points to the need of a specifically sociological perspective on regret, calling attention to the cultural and institutional framings of regret-arousing events. The (...) article further argues that secular changes in the types of regret imposed on individuals are paralleled by the spread of various forms of coping with it and that anticipated regret is responsible for both commitment to a chosen life-course and for sudden changes in it. The article ends with discussing the relationship between instrumental and moral regret, as well as the general implications of regret as a phenomenon for sociological understanding of rationality and human action. (shrink)

Mental accounting is a concept associated with the work of Richard Thaler. According to Thaler, people think of value in relative rather than absolute terms. They derive pleasure not just from an object’s value, but also the quality of the deal – its transaction utility (Thaler, 1985). In addition, humans often fail to fully consider opportunity costs (tradeoffs) and are susceptible to the sunk cost fallacy. Why are people willing to spend more when they pay with a credit (...) card than cash (Prelec & Simester, 2001)? Why would more individuals spend $10 on a theater ticket if they had just lost a $10 bill than if they had to replace a lost ticket worth $10 (Kahneman & Tversky, 1984)? Why are people more likely to spend a small inheritance and invest a large one (Thaler, 1985)? According to the theory of mental accounting, people treat money differently, depending on factors such as the money’s origin and intended use, rather than thinking of it in terms of the “bottom line” as in formal accounting (Thaler, 1999). An important term underlying the theory is fungibility, the fact that all money is interchangable and has no labels. In mental accounting, people treat assets as less fungible than they really are. Even seasoned investors are susceptible to this bias when they view recent gains as disposable “house money” (Thaler & Johnson, 1990) that can be used in high-risk investments. In doing so, they make decisions on each mental account separately, losing out the big picture of the portfolio. (See also partitioning and pain of paying for ideas related to mental accounting.) . (shrink)

Mindfulness is becoming increasingly popular in the workplace. This likely relates to a growing body of research linking mindfulness to a range of psychological outcomes such as reduced anxiety, depression and increased subjective wellbeing. However, while mindfulness has received a great deal of attention in clinical research, the evidence for workplace relevant benefits is less established. Additionally, outside of clinical research, mindfulness studies have rarely been replicated. Recent evidence suggests that the cognitive skills cultivated during meditation may be instrumental in (...) reducing biased thinking and increasing prosocial behaviour, but these findings have not been previously tested in a workplace setting. Specifically, mindfulness has been linked to reductions in implicit age bias, sunk-cost decision-making bias and increases in organisational citizenship behaviours. In two experiments using a workplace and laboratory sample, the present investigation aimed to test the reliability and generalisability of previous findings that a brief mindfulness meditation can reduce age and sunk-cost decision-making biases. To more directly test the potential positive benefits of mindfulness in a workplace setting, this study also investigated the impact of a mindfulness intervention on intention to perform OCB. While meditation significantly increased OCB intent, predictions relating to bias were not supported. Considerations for the degree to which empirical evidence aligns with claims in popular culture, along with implications for the practical uses of mindfulness in the workplace are explored. (shrink)

Hysteresis means literally “that which comes later,” being derived from the Greek verb ύστερέω. Thus, hysteresis effects, generally defined, are those that persist after the initial causes giving rise to the effects are removed. During the course of the 1980s, it became increasingly fashionable to invoke hysteresis effects to explain economic phenomena. Two of the main areas of application were to unemployment and international trade. In the case of unemployment, distinctive features of labor markets, such as social norms that rule (...) out wage-cutting in the face of rising unemployment, imply that “increases in unemployment have a direct impact on the ‘natural’ rate of unemployment”. The implication for macroeconomic systems is that “temporary shocks can have a permanent effect on the level of employment”. In the case of international trade, hysteresis effects arise from the industrial economics of sunk costs: “the argument is that firms must incur sunk costs to enter new markets, and cannot recoup these costs if they exit.… thus foreign firms that entered the U.S. market when the dollar was high do not abandon their sunk cost investments when the dollar falls.” The implication for trade flows is “an effect which persists after the cause that brought it about has been removed”. (shrink)

Decision-making competence refers to the ability to make better decisions, as defined by decision-making principles posited by models of rational choice. The adult decision-making competence (A-DMC) scale is a relatively mature evaluation tool used for decision-making competence. However, the A-DMC is yet far from other mature psychological evaluation tools, and especially the structure of A-DMC remains unclear. In the current study, we estimated a regularized partial correlation network of decision-making competence in a Chinese sample consisting of 339 adults who were (...) evaluated by the A-DMC, and then the centrality indicators were calculated. The results revealed that all nodes of the decision-making competence networks are positively associated, except for the association of resistance to framing (RF) and resistance to sunk costs (SC). The strongest edge was between RF and applying decision rules (DR; regularized partial correlation = 0.37). The centrality indicators of RF and applying DR were highest, revealing that these two variables may play important roles in the decision-making competence network. Our study conceptualizes the decision-making competence from network perspectives, so as to provide some insights for future researches. (shrink)

Escalation behavior occurs when individual decision-makers repeatedly invest time, money, and other resources into a failing project. A conceptual model of escalation behavior based on project, organizational, social and psychological forces was developed, and a 75-item measurement instrument was constructed to assess the various dimensions. The model was tested using data collected from a random sample of North Carolina Community College administrators. A LISREL measurement model analysis provided support for the four escalation forces. Two structural models were tested, leading to (...) support for a mediational model for escalation behavior. The most important contributor to Escalation was the Psychological force. (shrink)

Sentences such as “The ship was sunk to collect the insurance” exhibit an unusual form of anaphora, implicit control, where neither anaphor nor antecedent is audible. The non-finite reason clause has an understood subject, PRO, that is anaphoric; here it may be understood as naming the agent of the event of the host clause. Yet since the host is a short passive, this agent is realized by no audible dependent. The putative antecedent to PRO is therefore implicit, which it (...) normally cannot be. What sorts of representations subserve the comprehension of this dependency? Here we present four self-paced reading time studies directed at this question. Previous work showed no processing cost for implicit vs. explicit control, and took this to support the view that PRO is linked syntactically to a silent argument in the passive. We challenge this conclusion by reporting that we also find no processing cost for remote implicit control, as in: “The ship was sunk. The reason was to collect the insurance.” Here the dependency crosses two independent sentences, and so cannot, we argue, be mediated by syntax. Our Experiments 1–4 examined the processing of both implicit (short passive) and explicit (active or long passive) control in both local and remote configurations. Experiments 3 and 4 added either “3 days ago” or “just in order” to the local conditions, to control for the distance between the passive and infinitival verbs, and for the predictability of the reason clause, respectively. We replicate the finding that implicit control does not impose an additional processing cost. But critically we show that remote control does not impose a processing cost either. Reading times at the reason clause were never slower when control was remote. In fact they were always faster. Thus, efficient processing of local implicit control cannot show that implicit control is mediated by syntax; nor, in turn, that there is a silent but grammatically active argument in passives. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Drinking Rules! Byron and BaudelaireJoshua Wilner (bio)This essay 1 takes up two nineteenth-century texts on the theme of intoxication in which the poetic word can no longer, if it ever could, stably figure itself as the metaphoric other of the drug, that is, as a legitimate means of imaginative transport, and in which the writer’s enthrallment by the transporting substance of words shows us its addictive and, one might (...) say, prosaic face.The first of these pieces is a pair of stanzas from Canto II of Byron’s Don Juan, the other, Baudelaire’s brief prose poem “Enivrez-vous,” pieces that Jean Pommier [341] and, following Pommier, Robert Kopp [314–15] have suggested may be connected, though neither reader enters into much more detail than to note that both bits of writing, in Kopp’s words, “chant[e] l’ivresse.” Now the praise of drunkenness is of course a poetic commonplace, and the mere fact of its appearance in these two bits of text argues about as intimate a bond of kinship as that involved in pointing out that you and I are both Noah’s children. But there are, I would argue, compelling reasons for looking at these pieces in relation to one another and to which I believe Pommier was responding.That Byron mattered to Baudelaire is attested to by a number of references scattered throughout the latter’s work and letters, references which, while faulting Byron for garrulousness, praise him for having the thing that makes poets: “une diabolique personnalité” [OC 2: 232]. Perhaps the most interesting of these references occurs in a well-known letter that Baudelaire wrote to his mother in July 1857, shortly after Les fleurs du mal had been published and while the storm of controversy that was to culminate in the prosecution and expurgation of the collection for obscenity was rapidly gathering:On me refuse tout, l’esprit d’invention et même la connaissance de la langue française. Je me moque de tous ces imbéciles, et je sais que ce volume, avec ses qualités et ses défauts, fera son chemin dans la mémoire du public lettré, à côté des meilleurs poésies de V. Hugo, de Th. Gautier et même de Byron.[CP 1: 411][They deny me everything, the spirit of invention and even knowledge of the French language. I could care less about all these imbeciles, and I know that this volume, with its qualities and its faults, will make its way in the memory of the [End Page 34] lettered public, along with the best poetry of V. Hugo, of Th. Gautier, and even of Byron.]The pride of place Baudelaire reserves for Byron in this list was somewhat dated even in its time 2 and odd in other ways, especially given the more qualified expressions of admiration we meet elsewhere in his writings. But it becomes more understandable if one considers that for Baudelaire’s mother, who was of Byron’s generation and had early ties to England 3 (in fact, she apparently taught Charles English during his childhood [E. Crépet 30], making it, strangely enough, part of his “mother tongue”), Byron’s would have been the emblematic case of a writer for whom a reputation for depravity was overtaken by poetic honor, perhaps at the cost of his death in a noble cause.Apart from this evidence of a felt affinity, there are specific formal grounds for associating the two pieces. Since they are fairly brief, allow me first of all to cite them both. Here are the stanzas from Canto II of Don Juan: 179 Man, being reasonable, must get drunk; The best of life is but intoxication: Glory, the grape, love, gold, in these are sunk The hopes of all men, and of every nation; Without their sap, how branchless were the trunk Of life’s strange tree, so fruitful on occasion! But to return, - Get very drunk; and when You wake with head-ache, you shall see what then. 180 Ring for your valet - bid him quickly bring Some hock and soda-water, then you’ll know A pleasure worthy Xerxes the... (shrink)

Comment une école publique d’art en Grande Bretagne a-t-elle été créée, comment a-t-elle évolué au XIXe siècle et quelle fut sa place vis-à-vis de la Royal Academy of Arts? Quelles furent l’incidence et l’importance de l’économie politique utilitariste et plus particulièrement des écrits de J. Bentham sur le goût, l’éthique et l’utilité, dans le développement d’une institution subventionnée par l’État et destinée à l’éducation artistique de la nation? Quels furent les débats et les apories..

Early and automatic neuropsychological processes may be influenced by altered dopaminergic functions but cannot be fully explained by these or by altered reinforcement and extinction processes. The reinforcement-extinction model is excellent for understanding certain causal pathways of attention-deficit/hyperactivity disorder, but it can hardly explain the heterogeneous developmental trajectories of ADHD fully. It should be integrated into a multiple pathways model.