sunk cost effects

Question 1

Errors originate from 3 areas (Cohen, 1981)

Answer 1

1. Normative System: errors are rated in relation to a normative system that depends on the understanding of logic and deductive reasoning
    System sometimes does not fit to the behavior in the real world
2. Interpretation problem: participants do not always understand the task in the way that they are intended
3. External validity problem: many tasks in the lab are somewhat artificial and have little in common with the real life

Question 2

Distinguishing two kinds of rationality can solve the problem of normative system and explain errors:

Answer 2

1. Personal/ instrumental reasoning, which is used to achieve one’s goals
2. Normative reasoning, which is occurs in relation to a normative system

Question 3

Error =

Answer 3

when human prefers to follow instrumental instead of normative rationality
 Human rationality should be evaluated to the degree that it corresponds to a normative standard

Question 4

Descriptivism

Answer 4

focused on instrumental rationality (=the achievement of personal goals) and casts doubt on the supremacy of normative rationality
• Grounded rationality: Behavior B is rational for Agent A, in epistemic context E, if B facilitates achievement of A’s goals within the constraints of E

o Epistemic context = everything that affects the beliefs and desires of a person

Question 5

Psi Theory

Answer 5

presents a holistic architecture of the human mind, that integrates the emotional and motivational aspects into the cognitive system

Question 6

Three kinds of competence

Answer 6

epistemic competence (coping with any specific task), 
general competence (overall ability to cope with the environment) 
effect-related competence (ability to have an effective impact on the environment)

Question 7

Meta-Reasoning framework

Answer 7

refers to the process that monitor the progress of reasoning
• States of these processes are experienced as feelings of certainty or uncertainty
• If a certain level of certainty is reached, the judgement is made

Question 8

Sunk-cost effect

Answer 8

cognitive bias that is defined as the tendency to continue an endeavor once an investment in money, effort, or time has been made

Question 9

Example for utilization decision

Answer 9

if you have ticket for a concert and get invited for a party, that you would prefer, you will go for the concert, because you paid for it

Question 10

Example for progress decision

Answer 10

You would finish your Bachelor, if you realize in the last year that you do not like Psychology

Question 11

Aim of the Study:

Answer 11

clarify which goals people follow when they demonstrate instrumental rationality and what role unconscious need regulation plays

Question 12

From a normative view

Answer 12

irrationality = not choosing the option that maximizes gains (Sunk-cost effect = bias)

Question 13

From an instrumental view

Answer 13

choosing the own option can maintain or increase the feeling of competence (sunk cost effect = not necessarily a bias, because it helps to achieve the personal goal)