Apparent sunk cost effect in rational agents

Torben Ott, Paul Masset, Thiago S. Gouvêa, Adam Kepecs

Research output: Contribution to journalArticlepeer-review

Abstract

Rational decision makers aim to maximize their gains, but humans and other animals often fail to do so, exhibiting biases and distortions in their choice behavior. In a recent study of economic decisions, humans, mice, and rats were reported to succumb to the sunk cost fallacy, making decisions based on irrecoverable past investments to the detriment of expected future returns. We challenge this interpretation because it is subject to a statistical fallacy, a form of attrition bias, and the observed behavior can be explained without invoking a sunk cost-dependent mechanism. Using a computational model, we illustrate how a rational decision maker with a reward-maximizing decision strategy reproduces the reported behavioral pattern and propose an improved task design to dissociate sunk costs from fluctuations in decision valuation. Similar statistical confounds may be common in analyses of cognitive behaviors, highlighting the need to use causal statistical inference and generative models for interpretation.

Original languageEnglish
Article numberabi7004
JournalScience Advances
Volume8
Issue number6
DOIs
StatePublished - Feb 2022

Fingerprint

Dive into the research topics of 'Apparent sunk cost effect in rational agents'. Together they form a unique fingerprint.

Cite this