Wednesday, July 18, 2018

2973. The "Sunk Cost Fallacy" Not Limited To People

By Erica Goode, The New York Times, July 12, 2018


Suppose that, seeking a fun evening out, you pay $175 for a ticket to a new Broadway musical. Seated in the balcony, you quickly realize that the acting is bad, the sets are ugly and no one, you suspect, will go home humming the melodies.

Do you head out the door at the intermission, or stick it out for the duration?

Studies of human decision-making suggest that most people will stay put, even though money spent in the past logically should have no bearing on the choice.

This “sunk cost fallacy,” as economists call it, is one of many ways that humans allow emotions to affect their choices, sometimes to their own detriment. But the tendency to factor past investments into decision-making is apparently not limited to Homo sapiens.

In a study published on Thursday in the journal Science, investigators at the University of Minnesota reported that mice and rats were just as likely as humans to be influenced by sunk costs.

The more time they invested in waiting for a reward — in the case of the rodents, flavored pellets; in the case of the humans, entertaining videos — the less likely they were to quit the pursuit before the delay ended.
“Whatever is going on in the humans is also going on in the nonhuman animals,” said A. David Redish, a professor of neuroscience at the University of Minnesota and an author of the study.

This cross-species consistency, he and others said, suggested that in some decision-making situations, taking account of how much has already been invested might pay off.

“Evolution by natural selection would not promote any behavior unless it had some — perhaps obscure — net overall benefit,” said Alex Kacelnik, a professor of behavioral ecology at Oxford, who praised the new study as “rigorous” in its methodology and “well designed.”

“If everybody does it, the reasoning goes, there must be a reason,” Dr. Kacelnik said.

Even more important than the similarity among species was the study’s finding that sunk cost effects appeared only after the subjects had decided to pursue a reward, Dr. Redish noted, not while they were still deliberating whether to do so.

In effect, the animals seemed to consider the deliberation time not to be part of their investment — an indication, Dr. Redish said, that different brain processes might be at work in different aspects of decision-making.

The idea runs counter to the notion that “time is time, and you’re wasting it either way,” he said.

Shelly Flagel, an associate professor of psychiatry at the University of Michigan who was not involved in the study, said the research had “far-reaching implications across fields including education, economics, psychology, neuroscience and psychiatry.”

For example, she said, persisting in a behavior even though it has adverse consequences is reminiscent of the conduct “exhibited by people with addictions.”

“Once they start searching for their next ‘fix,’ they will often go hours or days on the same quest, even if it means giving up food, relationships, their job,” Dr. Flagel said.
Learning more about the distinct processes that go awry in psychiatric disorders like addiction might yield new strategies for treatment, she added.

In the study, led by a doctoral student, Brian M. Sweis, three research laboratories at the University of Minnesota collaborated to conduct tests on mice, rats and humans. The rodents were trained to forage for the flavored pellets — banana, chocolate, grape or plain — in a square maze with a “restaurant” in each corner.

The humans were taught to “forage” on a computer for videos of kittens, a dance competition, landscapes or bicycle accidents. Both rodents and humans were given an overall time limit for the foraging tasks.

In the rodents’ version of the task, the animal first entered an “offer zone” outside a restaurant and heard a pitched tone that informed it how long the wait would be for the pellet reward — a delay that varied randomly from 1 to 30 seconds.

The animal could skip the offer, in which case it was withdrawn, or it could enter the “wait zone” of the restaurant, setting off a countdown signaled by a descending tone. At any time during the countdown, the rodent could choose to leave the restaurant, but once it left it could not return without going all the way around through the other restaurant offer zones.

In the human version of the experiment, subjects were offered a video and presented with buttons saying “stay” or “skip.” A download bar informed them how long they would have to wait to view the video. Clicking the “stay” button started a countdown, and the screen showed the progression of the download.

The study found that the more time the rodents spent in the “wait zone,” the more likely they were to stick out the delay to the end, even though the longer they waited, the more it cut into their overall time to seek food.

Similarly, the longer the human subjects spent waiting for a video to download, the more likely they were to stay the course until the download was finished.

Surprisingly, the amount of time that the subjects — rodent or human — spent deliberating whether to accept the “offer” of a reward did not affect whether they quit before receiving it or stayed through to the end.

“Obviously, the best thing is as quick as possible to get into the wait zone,” Dr. Redish said. “But nobody does that. Somehow, all three species know that if you get into the wait zone, you’re going to pay this sunk cost, and they actually spend extra time deliberating in the offer zone so that they don’t end up getting stuck.”

Dr. Flagel, of the University of Michigan, noted that as compelling as the new research was, it was not without limitations, including the fact that the tasks presented to humans and rodents, though similar in some ways, were still quite different.

“The challenge moving forward,” Dr. Flagel said, “is going to be to know that one is truly capturing the same phenomenon across species. Or perhaps more appropriately, what is the meaning of the differences that will be revealed between species?”

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