BIAS OF THE WEEK

Sunk Cost Fallacy

In an experiment, a group of clients paid their subscription to a theater series full price, while two other groups received discounts. 

Customers who had initially paid more for a season attended more plays during the next 6 months, because they experienced a higher sunk cost when they purchased the season tickets.

Customers are more motivated to continue using a product or service if they have already invested a significant amount of money in it.

See the full study here :

Arkes, H. R., & Blumer, C. (1985). The psychology of sunk cost. Organizational behavior and human decision processes, 35(1), 124-140.

 

Want to know more about biases?

Hindsight Bias

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Peak-End Rule

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Noble Edge Effect

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Binary Bias

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