Understanding decisions about sunk costs from older and younger adults' perspectives

Prior research indicates that older adults (60+ years) are less subject to the sunk-cost fallacy compared with younger adult college students. The objective of this research was to determine if age-related differences in decisions about sunk costs reflected differences in what was salient to individuals about the situation when they described their decision-making goals.

Using hypothetical decision-making scenarios, we examined older (N = 21) and younger (N = 20) adults' decisions about sunk costs. Participants responded to open-ended interview questions about their decision-making goals. A coding scheme was developed using qualitative methods and was used to reliably categorize the issues and concerns people expressed when describing their decision-making goals.

Compared with younger adults, older adults were less likely to commit the sunk-cost fallacy and were more likely to make normatively correct decisions. When describing their goals, older adults were less likely to focus on the presence or absence of the prior investment (the sunk cost). The salience of investment-related information to individuals when describing their goals mediated age-related differences in the sunk-cost fallacy and normatively correct decisions.

The results illustrate how consideration of people's own perspectives of decision-making situations may inform understanding of age-related differences in decision-making fallacies.