A reverse sunk cost effect in risky decision making: Sometimes we have too much invested to gamble

The sunk cost effect refers to the empirical finding that people tend to let their decisions be influenced by costs made at an earlier time in such a way that they are more risk seeking than they would be had they not made these costs. This finding seems to be in conflict with economic theory which implies that only incremental costs and benefits should affect decisions. The effect is often explained in terms of prospect theory of (Kahneman, D., Tversky, A., 1979. Prospect theory: An analysis of decision under risk. Econometrica 47, 263–291), suggesting that sunk costs may induce a ‘loss frame,’ consequently causing risk seeking behavior. We argue that sunk costs may also result in risk aversion. In the present study we investigated the effect of time and effort investments (Behavioral Sunk Costs) on risky decision making in gain and loss situations. The results show that, in agreement with prospect theory, participants were more risk averse in gain situations than in loss situations. Moreover, incurring Behavioral Sunk Costs appeared to increase risk aversive choices, i.e., a reverse sunk cost effect. Furthermore, the results suggest that, in loss situations, Behavioral Sunk Costs mainly lead to risk aversive behavior if opting for the ‘safe’ alternative is not accompanied by an increased possibility to regret the decision.     

Multiple reference points in investor regret

Regret is the result of a comparison between “what is” and “what might have been”. Although regret is a relevant emotion in the life of investors, research studying the regrets of real investors and how these are influenced by multiple reference points is lacking. We present a field survey that investigated the regrets of real stock investors in relation to multiple “what might have been’s.” We found that their regrets are most influenced by what their outcomes might have been had they not invested, by their expected outcomes and by the best-performing unchosen stocks. In addition, we also found that the feeling of regret was influenced by losses or gains relative to each reference point rather than by the size of the loss or gain.     

Behavior in the loss domain: An experiment using the probability trade-off consistency condition

In gambles with two or more outcomes, the two versions of prospect theory, i.e., original prospect theory and cumulative prospect theory, make use of different composition rules and therefore yield different valuations of gambles. We test these composition rules in the loss domain using the probability trade-off consistency condition. The probability trade-off consistency condition offers a convenient and efficient way to compare gambles under risk and decision makers’ behavior. Experimental findings suggest that the rank dependent version of prospect theory, or cumulative prospect theory, cannot be rejected in the loss domain while original prospect theory is clearly rejected when a certainty effect is taken into account.     

Saving regret and procrastination

In countries, where a substantial proportion of retirement income rests on savings, there is much concern that a sizeable fraction of the population reaches retirement with insufficient financial resources. We define saving regret as the wish in hindsight to have saved more earlier in life. We measured saving regret and possible determinants in a survey of U.S. households in which respondents were aged 60–79. We find high levels of saving regret, affirmed by some 58%. Saving regret exhibits significant and plausible correlations with personal characteristics and wealth: Married, older, healthier and wealthier respondents are less likely to report saving regret, suggesting the measure’s validity. We find only weak evidence for correlations between saving regret and measures of procrastination: persons with traits associated with procrastination express saving regret about as often as those without those traits.     

Really troubled girls: Gender differences in risky sexual behavior and its correlates in a sample of juvenile offenders

Despite numerous studies on the myriad of psychosocial factors that affect youthful offenders, research on gender differences with respect to risky sexual behavior are limited. Using data on juvenile offenders in a residential facility, we analyzed impact of gender on sexual behavior (N = 227). Girls reported higher likelihood of diagnosis with sexually transmitted diseases, and injecting drug use including heroin and cocaine than boys. Multivariate analysis indicated that number of sexual partners, childhood trauma, and services received from emergency shelter and psychiatric settings were associated with risky sexual behavior. Discouraging, abusive and dysfunctional home environment with little support from parents/caregivers, or teachers, priests/religious leaders appear to dispose youth to a life of risky sex, drugs and delinquency.     

Comparing a risky choice in the field and across lab procedures

Controlled laboratory experiments have become a generally accepted method for studying economic behavior, but there are two issues regarding the reliability of such work. The first pertains to the ability to generalize experimental results outside the laboratory. The second pertains to the impact the payment procedure has on observed behavior. This paper adds empirical insight into both issues. Using data from the promotional campaign of a bank and a laboratory experiment that closely mimics the same decision, we find similar levels of risk taking controlling for gender and age. We also compare behavior on this same risky choice across three distinct experimental payoff procedures: a single salient choice as in the field, multiple responses for similar choices with one selected at random for payment, and a single salient choice that has only a small probability of being implemented. We find nearly identical behavior across these three payment procedures.     

Bounded rationality and consumer choice: an evaluation of consumer choice of mobile bundles

Although numerous prior studies have examined consumer valuations in bundling transactions from a theoretical perspective, relatively few have focused on large datasets. In addition, little prior research has targeted developing telecommunication markets. To address these gaps in the literature, we examine the rationality of consumers' bundling choices in the mobile telecommunication industry, using operational data from China Telecom. We compare the current prices paid by consumers to the optimal prices of alternative bundling plans, based on the consumers' actual usage. We determine whether bundling choice is affected by risk aversion, the complexity of the bundle, and learning effects. The findings suggested that many users chose sub-optimal bundles that were more expensive than others were. The results showed that consumers were risk averse, and they were more likely to make non-optimal bundle selections with more complex usage patterns. No significant differences were found according to gender, age, or usage level.     

Parenthood,risk attitudes and risky behavior

This study analyzes how risk attitudes change when individuals experience the major life event of becoming a parent by using longitudinal data for a large and representative sample of individuals from Germany. The analysis uses a survey-based measure of risk aversion. The estimation is based on an individual fixed effects model similar to an event study. On average, men and women experience a considerable increase in risk aversion around the time of first childbirth. This increase already starts as early as two years before they become parents, it is largest shortly after childbirth and it disappears when the child becomes older. When analyzing risky choices, the results indicate that risky labor market behavior remains unaffected by parenthood.     

Parental choice and the rural primary school: Lifestyle,locality and loyalty

This paper discusses the geography of parental choice in a rural locale and shows how a group of parents negotiated their way through the process of primary school choice. Using ethnographic data collected through interviews and observations with parents and staff from three rural primary schools in England, the research utilises Bourdieu's concepts of capital, habitus and field to show how the resources and values the parents held affected the school choices they made. The paper demonstrates that the longer-term resident local parents were influenced not only by their cultural capital but also by familial ties and an emotional commitment to the rural locale and these parents were therefore more inclined to support their local school. In contrast, the more recent newcomer parents used their cultural capital and spatial power to shop around to find what they believed to be the ‘right’ school. The paper argues that the newcomer parents had less allegiance to place and hence to the symbolic position that the school holds within the rural community within which they lived.     

Standpoint theory and middle-range theorizing in International Sociology

This paper responds to Julian Go's Lecture “Thinking against Empire. Anti-colonial Thought and Social Theory.” It proceeds in two parts: I first follow Go's invitation to read and reread Mabel Dove Danquah and Frantz Fanon and explore what their work contributes to our understanding of state-forms. I then examine the terms of Go's invitation more closely. I contrast Go's juxtaposition of imperial sociology on the one hand and anti-colonial sociology on the other hand, with the broader range of theoretical traditions and methods, which a practice-oriented sociology of sociology and an international history of sociology would highlight. I raise the question what “standpoint” adds to the authors Go discusses and the broader range of scholars who have engaged with post-colonial contexts in their research at this point in time. Calling for consideration of the anti-colonial standpoint is a particular choice, which has a distinctive heritage in Hegelian-Marxian projections of the social whole and is in tension with either deep exploration of particular thinkers or the middle-range theorizing that Go also seems to endorse. Defined at a level of abstraction that is “above” (or underneath) actual conversations in a range of fields and subfields, it can appear as a “test” for scholars who have long engaged with post-colonial contexts, which can have unintended consequences when coupled with the institutional power and asymmetric insularity of Anglo-American academia.     

Eyes on the account size: Interactions between attention and budget in consumer choice

The context surrounding a consumer decision, such as one’s overall budget available for purchases, can exert a strong effect on the subjective value of a product. Across three eye-tracking studies, we explore the attentional processes through which budget size influences consumers’ purchasing behavior. Higher budgets increased and sped up purchasing even when items were affordable at all budget sizes. Moreover, attention interacted with budget size to promote purchasing at higher budgets. Finally, individual differences in the magnitude of the budget effect related to attentional patterns: those whose decisions depended more on budget exhibited more budget-price transitions and less variability in search patterns compared to those whose decisions were less dependent on budget. These findings indicate that attention moderates the effect of budgets on purchasing decisions, allowing low budgets to serve as self-control devices and large budgets to generate impulse purchases.     

In search of the mechanisms conducive to class differentials in educational choice: a mixed method research

This paper inquires into the mechanisms conducive to social class differentials in educational choice in Flanders (the Northern, Dutch‐speaking part of Belgium) using both quantitative data gathered from parents (N = 1339) and qualitative data gathered during two focus groups with pupils (N = 16). Unlike most of the previous studies, this study takes into consideration all three theoretical perspectives that have driven research on class differentials in educational choice so far, namely cultural reproduction theory, rational action theory and the notion of social capital. Logistic regression analysis shows that self‐selection does also occur in Flanders and that the effect of parental SES cannot be explained by a specific measure of cultural capital centred on knowledge of the educational system, nor by measures of social capital. What emerges most clearly from this study is that pupils' perception of their choice process is powerfully framed by deep‐rooted conceptions about the educational alternatives available to them. Furthermore, children's choices seem to be delimited by parents' opinions of which educational alternatives were acceptable, and which ones not. Our study calls for future research to take the wider context of decision‐making processes more explicitly into account.     

Motivating child welfare case managers: An application and extension of feedback information theory

No empirical studies in the child welfare literature have examined how job characteristics impact work motivation. The present study addresses this conspicuous research gap by surveying 419 county-based child welfare case managers across the state of New York. As predicted by feedback information theory, work motivation was enhanced by instrumental feedback and reduced when job complexity was introduced as a moderator. Consistent with the challenge–hindrance stress model, job control positively influenced job complexity's affects on the instrumental feedback–work motivation relationship. Findings advance the child welfare literature by demonstrating that the motivational effects of instrumental feedback are both conditional and dynamic.     

The prominence of formal theory in sociology

In sociology, work in formal theory is more extensive and intensive today than at any time in the past, but remains invisible to some, including S. Zhao [(1996) “The Beginning of the End or the End of the Beginning: The Theory Construction Movement Revisited,” Sociological Forum, Vol. 11, No. 2, pp. 305–318]. I trace the growth of formal theory in sociology focusing on theoretical research programs and show that, whereas formal theory came after the books on theory construction, it was not based on them. Elementary Theory's research program provides an example of that discontinuity. Some misunderstandings concerning formal theory can be traced to the Maryland Theory Conference of 1990 and a critique of selected ideas of that Conference is offered.     

HIV conspiracy theory beliefs mediates the connection between HIV testing attitudes and HIV prevention self-efficacy

Abstract

Objective: High rates of sexually transmitted infections (STIs) and human immunodeficiency virus (HIV) can be found in states in both the Appalachian and Southeastern regions of the United States. As infection rates increase, it is imperative to understand factors that improve HIV prevention. The current work explored whether HIV conspiracy beliefs influences the link between HIV testing attitudes and perceived prevention ability. Participants: Four samples were collected during Fall 2013 (N?=?373), Spring 2014 (N?=?231), Fall 2014 (N?=?345), and Spring 2015 (N?=?369) at a rural, Southeastern, Appalachian university. Methods: Participants in all samples completed an online survey. Results: Four studies showed that HIV conspiracy theory beliefs mediated the relationship between HIV testing attitudes and HIV prevention self-efficacy. Conclusions: HIV conspiracy theory beliefs at least partially explain the connection between testing attitudes and HIV prevention self-efficacy. Results have implications for the role of HIV testing attitudes, beliefs, and self-efficacy.     

The effects of information form and domain-specific knowledge on choice deferral

Three studies examined the effect of information form on choice deferral in consumer choice and explored the moderating role of knowledge about the product domain. Two theoretical approaches were contrasted: (1) The process approach predicting that choice deferral varies as a function of information form, and (2) the communication approach predicting an interaction of information form and domain-specific knowledge. Participants were presented with different laptops described in an absolute (e.g. ‘300 GB hard disc’), evaluative-numerical (e.g. ‘hard disc with 30 out of 100 points in an expert rating’) or evaluative-verbal (e.g. ‘bad hard disc’) information form, and they could choose to buy one of the laptops or defer. Domain-specific knowledge was also assessed. In Study 1, evaluative-numerical and evaluative-verbal values led to more deferral in people with high domain-specific knowledge. The pattern for evaluative-numerical and evaluative-verbal values was replicated for a different information organization in Study 2. Study 3 showed that absolute values led to more deferral the less knowledgeable participants were and demonstrated that domain-specific knowledge and deferral were unrelated when absolute and evaluative-verbal values were presented in combination. In sum, the results support the communication approach and have methodological implications for decision research and theoretical implications for understanding choice deferral in real-life decisions.     

Immigrant-origin youth and the indecisiveness of choice for upper secondary education in Finland

The educational transitions of Finnish youth of immigrant background are challenging. They confront more difficulties in a twofold manner: they have more difficulties in transitioning to upper secondary education and they seem to drop out of education more often than their Finnish-origin counterparts. This study aimed to accomplish a view of the complex intertwinement of attitudes and experiences with upper secondary education choices, gender and origin. We compared immigrant- origin students (n?=?161) with Finnish-origin students (n?=?156) in a survey conducted during the final year of comprehensive school. Our objectives were to analyse the variation in attitudes, experiences and aspirations concerning post-comprehensive transition in gender and origin of the youth, and to analyse the factors behind the indecisiveness of the transitions. We concluded that youth with immigrant origin in general, and boys in particular, share a contradiction we termed the ‘paradox of immigrant schooling’, which refers to the combination of a positivity toward education and difficulties in learning and studying. We also found an immigrant-related contradiction between determinant and quite high occupational aspirations, and uncertainty of upper secondary choices. Our outcomes indicate that the immigrant-origin youth confront the upper-secondary choices in a much more complex and multidimensional situation than their Finnish-origin counterparts.     

Parent presence and gender‐typicalness of educational choice1

Given parental influence on children's educational choices, new family constellations may impact on sex segregation in school and thus in the labour market. This paper addresses the question of what consequence father absence and stepfather presence may have for choice of the male‐dominated natural science/technology (NT) programme in Swedish upper secondary school. The data include register information on all pupils who attended the ninth grade of the Swedish compulsory school in 1998 and 1999 and their parents (n = 73,824). While children in mother‐only households are less likely to choose the NT programme compared with children residing with two original parents, this is accounted for by differences in socioeconomic conditions and in grade sum. Fathers, like mothers, also have a more direct influence on children's educational choices of field of study via their own education and occupation. However, what has not been noted in previous research is that this also applies to ‘absent’ fathers and, for boys, to stepfathers as well.     

Behavioral implications of providing real incentives in stated choice experiments

This paper explores the potential impacts of introducing real economic incentives in choice experiments (CE). While many others have investigated such impacts before, the majority of the literature has focused solely on mitigation of hypothetical bias. We contribute to this literature by widening the scope of research to other behavioral aspects where consumers in CE are often found to deviate from homo economicus. We develop a theoretical model where not only Willingness to pay (WTP) measures but also decision processing can be affected by the introduction of an economic incentive. Specifically, our model allows for differential impacts on attribute processing, depending on the character of the attribute as well as self-image effects. In an empirical CE survey, we find some, though not unequivocal, support of our model. Even though we find no impact on WTP from introducing an economic incentive, we find marked benefits in relation to a number of behavioral aspects that together would favor the use of an economic incentive regardless of hypothetical bias being present or not.     

Scrutinizing impacts of conspiracy theories on readers' political views: a rational choice perspective on anti‐semitic rhetoric in Turkey

Although conspiracy theories have been politically significant throughout history, only a few empirical studies have been about their influence on readers' views. Combining a rational choice approach with a content analysis of an anti‐Semitic best‐selling conspiracy theory book series in Turkey – the Efendi series – and semi‐structured interviews with its readers, this paper reveals the effects of the conspiracy theories on readers' political perspectives. The findings suggest that whereas the rightists are reactive to the Jewish origins of the Dönmes, the leftists oppose the Dönmes as dominant bourgeois figures. This paper concludes that left‐ and right‐wing adherents use the conspiratorial accounts in line with their political views and ontological insecurities. It expands the existing academic literature, which conceptualizes conspiracy theories either as paranoid delusions or as neutral, rational narratives, by showing that they can be both.