TOO MUCH INVESTED TO GO BACK: AN INVESTIGATION OF SUNK COST EFFECTS FOR MONETARY AND NON-MONETARY RESOURCES

This dissertation investigates the sunk cost phenomenon in the context of non-monetary resources and tests theoretical explanations. I developed an organizing framework of interdisciplinary research on sunk costs. Specifically, the sunk cost effect is influenced by a set of antecedents that are classified as individual, investment, social, and economic variables and these effects are moderated by time and occur in the context of monetary and non- monetary resources. Based on this research, I predicted that coupons that require payment will have higher redemption rates than coupons that do not require payment, since payment in the former case represents a sunk cost. Another prediction is that consumers who spend a large amount of time and effort shopping, thus incurring a large sunk cost, will spend more money than those who spend relatively less time and effort shopping. Both these predictions were supported and were explained by the consumer's desire to justify his previous decision.