scholarly journals Mnemonomics: The Sunk Cost Fallacy as a Memory Kludge

2011 ◽  
Vol 3 (4) ◽  
pp. 35-67 ◽  
Author(s):  
Sandeep Baliga ◽  
Jeffrey C Ely
Keyword(s):  
Decision Maker ◽  
Sunk Costs ◽  
Controlled Experiment ◽  
Sunk Cost ◽  
Optimal Response ◽  
Simple Version ◽  
Additional Information ◽  
Limited Memory ◽  
New Information ◽  
Memory Constraints

We offer a theory of the sunk cost fallacy as an optimal response to limited memory. As new information arrives, a decision-maker may not remember all the reasons he began a project. The sunk cost gives additional information about future profits and informs subsequent decisions. The Concorde effect makes the investor more eager to complete projects when sunk costs are high and the pro-rata effect makes the investor less eager. In a controlled experiment we had subjects play a simple version of the model. In a baseline treatment subjects exhibit the pro-rata bias. When we induce memory constraints the effect reverses and the subjects exhibit the Concorde bias. (JEL D24, D83, G31)

The Interpersonal Sunk-Cost Effect

2018 ◽  
Vol 29 (7) ◽  
pp. 1072-1083 ◽  
Author(s):  
Christopher Y. Olivola
Keyword(s):  
Decision Making ◽  
Decision Maker ◽  
Sunk Costs ◽  
Rational Decision ◽  
Sunk Cost ◽  
Rational Decision Making ◽  
Social Closeness ◽  
Sunk Cost Effect ◽  
Human Tendency ◽  
Cost Effect

The sunk-cost fallacy—pursuing an inferior alternative merely because we have previously invested significant, but nonrecoverable, resources in it—represents a striking violation of rational decision making. Whereas theoretical accounts and empirical examinations of the sunk-cost effect have generally been based on the assumption that it is a purely intrapersonal phenomenon (i.e., solely driven by one’s own past investments), the present research demonstrates that it is also an interpersonal effect (i.e., people will alter their choices in response to other people’s past investments). Across eight experiments ( N = 6,076) covering diverse scenarios, I documented sunk-cost effects when the costs are borne by someone other than the decision maker. Moreover, the interpersonal sunk-cost effect is not moderated by social closeness or whether other people observe their sunk costs being “honored.” These findings uncover a previously undocumented bias, reveal that the sunk-cost effect is a much broader phenomenon than previously thought, and pose interesting challenges for existing accounts of this fascinating human tendency.

Did the 2011 Change to NFL Rookie Compensation Alter How Sunk Costs Affect Utilization?

2020 ◽  
pp. 152700252098343
Author(s):  
Quinn Andrew Wesley Keefer
Keyword(s):  
Collective Bargaining ◽  
Regression Discontinuity ◽  
Sunk Costs ◽  
Collective Bargaining Agreement ◽  
Sunk Cost ◽  
Wage Scale ◽  
The One

The 2011 NFL collective bargaining agreement introduced significant changes to rookie compensation, including a rookie wage scale. We test if the new rules changed how sunk costs affect utilization for drafted rookies. Our regression discontinuity results show a robust sunk-cost fallacy that is similar in magnitude to the one documented under the previous agreement. Second-round selections play significantly less than their first-round counterparts, as measured by percentage of games started, total snaps played, and percentage of snaps played. However, the effect is not evident beyond the rookie season. Additional results show coaching success and coaching changes are important factors.

Optimal list order under partial memory constraints

1980 ◽  
Vol 17 (4) ◽  
pp. 1004-1015 ◽  
Author(s):  
Y. C. Kan ◽  
S. M. Ross
Keyword(s):  
Decision Maker ◽  
Wide Class ◽  
List Order ◽  
Memory Constraints ◽  
Average Position ◽  
As If

Suppose that we are given a set of n elements which are to be arranged in some order. At each unit of time a request is made to retrieve one of these elements — the ith being requested with probability Pi. We show that the rule which always moves the requested element one closer to the front of the line minimizes the average position of the element requested among a wide class of rules for all probability vectors of the form P1 = p, P2= · ·· = Pn = (1 – p)/(n − 1). We also consider the above problem when the decision-maker is allowed to utilize such rules as ‘only make a change if the same element has been requested k times in a row', and show that as k approaches infinity we can do as well as if we knew the values of the Pi.

Propeller thrust force contribution to airplane longitudinal stability

2018 ◽  
Vol 90 (9) ◽  
pp. 1474-1478
Author(s):  
Miodrag Milenković-Babić
Keyword(s):  
Stability Analysis ◽  
Thrust Force ◽  
Standard Procedure ◽  
Longitudinal Stability ◽  
Content Type ◽  
Additional Information ◽  
New Information ◽  
Practical Implications ◽  
Theoretical Results ◽  
Propeller Thrust

Purpose This paper aims to present the new information about propeller thrust force contribution to airplane longitudinal stability analysis. Design/methodology/approach The method presented in this paper is empirical, shows how propeller thrust force derivative can be obtained and gives some additional information about misinterpretation of the propeller thrust effects that are present in the current literature. Findings New information about propeller thrust force contribution to airplane longitudinal stability analysis has been presented. This information should enable more precise insight in aircraft stability analysis and better understanding of the physical process that occurs during maneuver flight. Practical implications The information presented in this paper is new and specific to the propeller aircraft configuration. The methods used here are standard procedure to evaluating propeller thrust force derivative. Originality/value The information in this paper presents theoretical results. The method for calculating thrust force contribution to the airplane longitudinal stability is given depending on the propeller type and should enable good engineering results.

Testing Cognitive Models through Computer-Controlled Experiments

1971 ◽  
Vol 8 (3) ◽  
pp. 291-297 ◽  
Author(s):  
G. David Hughes ◽  
Jose L. Guerrero
Keyword(s):  
Information Processing ◽  
Subjective Probability ◽  
Cognitive Models ◽  
Controlled Experiment ◽  
Subjective Probabilities ◽  
Controlled Experiments ◽  
New Model ◽  
New Information ◽  
Computer Controlled

A computer-controlled experiment was used to test balance, reinforcement, and congruity models and to develop a new model to predict changes in buyers’ subjective probabilities after receiving new information. Subjective probability and attitude models were tested to determine their utility in studying buyers’ information processing.

Additional information on the distribution and ecology of the recently described diatom species Geissleria gereckei

2017 ◽  
Vol 46 (1) ◽  
Author(s):  
Danijela Vidakovic ◽  
Marco Cantonati ◽  
Marcella Mogna ◽  
Olga Jakovljević ◽  
Sanja Šovran ◽  
...  
Keyword(s):  
Diatom Species ◽  
Additional Information ◽  
New Information ◽  
Distribution And Ecology

AbstractThe main objective of this paper is to report new information about the distribution and ecology of a recently described diatom species,

Role of Sunk Cost in Engineering Idea Generation: An Experimental Investigation

2013 ◽  
Vol 135 (12) ◽  
Author(s):  
Vimal K. Viswanathan ◽  
Julie S. Linsey
Keyword(s):  
Mental Models ◽  
Design Process ◽  
Sunk Costs ◽  
Process Models ◽  
Physical Models ◽  
Controlled Study ◽  
Time Cost ◽  
Sunk Cost ◽  
Sunk Cost Effect ◽  
Cost Effect

Researchers and design practitioners advocate building physical models of ideas at early stages of the design process. Still, the cognitive effects of physical models remain largely unknown. Some studies show that physical models possess the potential to facilitate the generation of high quality ideas. Conversely, other studies demonstrate that physical models can lead to design fixation. A prior controlled study by the authors failed to detect fixation due to early stage physical models. Based upon these conflicting results, this study hypothesizes that the fixation observed in prior studies can be explained by the Sunk Cost Effect. The Sunk Cost Effect pertains to an individual's reluctance to choose a different path of action once he/she invests a significant cost (money, time, or effort). According to this theory, as designers spend more time, money or effort in building physical models, they tend to generate ideas with lower novelty and variety. The prior observational studies use complicated design problems with higher costs compared to the controlled study, possibly explaining the difference in results. This study also hypothesizes that physical models supplement designers' erroneous mental models. The authors investigate these hypotheses through a controlled, between-subject experiment with five conditions: Sketching Only, Metal Building (low time cost), Plastic Building (high time cost), Metal Constrained Sketching, and Plastic Constrained Sketching. In each condition, subjects construct their ideas using materials specified by the name of the condition. The constrained sketching conditions assist in determining if participants tend to limit their ideas to only ones that can be built with given materials even though they are instructed to write down all ideas. The results confirm that the sunk cost of building plays a vital role in the observed fixation; thus, physical models do not inherently cause fixation. Moreover, results also show that physical models supplement designers' erroneous mental models, leading to higher quality ideas. To minimize sunk costs very early in the design process, models should be built with materials requiring minimal time, cost, and effort for the designers.

The morphology of free-living stages and immature parasites of Rhabdias paraensis (Nematoda: Rhabdiasidae), a parasite of Rhinella marina (Anura: Bufonidae) in Brazil

2016 ◽  
Vol 61 (1) ◽  
Author(s):  
Francisco Tiago de Vasconcelos Melo ◽  
Luciana de Cássia Silva do Nascimento ◽  
Lilian Cristina Macedo ◽  
Jeannie Nascimento dos Santos ◽  
Yuriy Kuzmin
Keyword(s):  
Life Cycle ◽  
Buccal Capsule ◽  
Original Description ◽  
Species Determination ◽  
Free Living ◽  
Rhinella Marina ◽  
Additional Information ◽  
New Information ◽  
Apical View

AbstractRhabdias paraensis Santos, Melo, Nascimento, Nascimento, Giese et Furtado, 2011 was described based on fully gravid worms. Further investigations on the free-living stages, immature worms and young individuals were facilitated by cultivation in the laboratory, which allowed us to add new information about the morphology and development of the species. Observations on the free-living development of R. paraensis showed that the life cycle is typical of Rhabdias, with alternation of gonochoristic and hermaphroditic generations and without homogony. Males of the free-living generation were different from those in several species of the genus studied previously. In the original description, the excretory glands and duct were absent in gravid specimens of R. paraensis, while in this study, distinct excretory glands and a duct were observed in immature and young individuals. Additionally, we recognised the separation of the buccal capsule walls into anterior and posterior portions and described the specific shapes of these portions in lateral and apical view. Studies on the morphology and development of free-living stages of Rhabdias spp. from Neotropical regions may provide additional information for species determination.

scholarly journals Developing a multi-step recurrent algorithm to maximize the criteria of correntropy

2021 ◽  
Vol 1 (4 (109)) ◽  
pp. 54-63
Author(s):  
Oleg Rudenko ◽  
Oleksandr Bezsonov ◽  
Victor Borysenko ◽  
Tetiana Borysenko ◽  
Sergii Lyashenko
Keyword(s):  
Linear Model ◽  
Lyapunov Method ◽  
Weighting Factor ◽  
Recurrent Algorithm ◽  
Limited Memory ◽  
New Information ◽  
Step Procedure ◽  
Evaluation Algorithm ◽  
Unbiased Estimates ◽  
Step Algorithm

This paper considers the task of constructing a linear model of the object studied using a robust criterion. The functionality applied, in this case, is correntropy. That makes it possible to obtain estimates that have robust properties. The evaluation algorithm is a multi-step procedure that employs a limited number of information measurements, that is, it has limited memory. The feature of the algorithm is that the matrices and observation vectors involved in estimate construction are formed in the following way: they include information about the newly arrived measurements and exclude information about the oldest ones. Depending on the way these matrices and vectors are built (new information is added first, and then outdated is excluded, or the outdated is first excluded, and then a new one is added), two estimate forms are possible. The second Lyapunov method is used to study the convergence of the algorithm. The conditions of convergence for a multi-step algorithm have been defined. The analysis of the established regime has revealed that the algorithm ensures that unbiased estimates are obtained. It should be noted that all the estimates reported in this work depend on the choice of the width of the nucleus, the information weighting factor, and the algorithm memory, the task of determining which remains open. Therefore, these parameters' estimates should be applied for the practical use of such multi-step algorithms. The estimates obtained in this paper allow the researcher to pre-evaluate the possibilities of identification using a multi-step algorithm, as well as the effectiveness of its application when solving practical tasks

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