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[73] (see also Sunk cost fallacy) Pseudocertainty effect, the tendency to make risk-averse choices if the expected outcome is positive, but make risk-seeking choices to avoid negative outcomes. [74] Status quo bias, the tendency to prefer things to stay relatively the same. [75] [76] System justification, the tendency to defend and bolster the ...
Confirmation bias can also lead to escalation of commitment as individuals are then less likely to recognize the negative results of their decisions. [7] On the other hand, if the results are recognized, they can be blamed on unforeseeable events occurring during the course of the project. The effect of sunk costs is often seen escalating ...
The bygones principle does not always accord with real-world behavior. Sunk costs often influence people's decisions, [7] [14] with people believing that investments (i.e., sunk costs) justify further expenditures. [16] People demonstrate "a greater tendency to continue an endeavor once an investment in money, effort, or time has been made".
The sunk-cost fallacy shows up when people make the following kind of argument. “Since we’ve already got those useless bridges, we must continue. Otherwise, they will remain useless.”
The IKEA effect is a cognitive bias in which consumers place a disproportionately high value on products they partially created. The name refers to Swedish manufacturer and furniture retailer IKEA, which sells many items of furniture that require assembly.
The Reddit forum “Buy It for Life” has 2.1 million followers. In France, a national anticounterfeiting campaign partnered with luxury brands such as Chanel to educate consumers on how knock ...
Framing bias: This is best avoided by increasing numeracy and presenting data in several formats (for example, using both absolute and relative scales). [73] Sunk-cost fallacy is a specific type of framing effect that affects decision-making. It involves an individual making a decision about a current situation based on what they have ...
For example, producing a quote based on a manager's preferences, or, negotiating a house purchase price from the starting amount suggested by a real estate agent rather than an objective assessment of value. Gambler's fallacy (aka sunk cost bias), the failure to reset one's expectations based on one's current situation. For example, refusing to ...