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数量经济与金融系列讲座第366期:Sunk Cost as a Self-Management Device

  发布日期:2017-11-30  浏览次数:

Title:Sunk Cost as a Self-Management Device


Abstract:The sunk cost effect has been widely observed in individual decisions. Building on an intra-personal self-management game, the paper theoretically shows that the sunk cost effect may stem from an attempt to overcome the under-investment problem associated with a high degree of present bias or resolve the multi-selves coordination problem when the degree of present bias is low. Especially for individuals with severe present bias, the current self may take a costly action (which is a sunk cost for the future self) to signal the individual's high success probability that motivates his future self-disciplining behaviors. In equilibrium, a higher level of sunk cost is more likely to give rise to a higher probability for the individual to continue the project. We then conduct a laboratory experiment. The empirical findings are consistent with our theoretical implications.

时间:2017年11月30日 14:00-15:30