Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314536 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 17639
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
The sunk cost fallacy is typically covered in introductory economics courses. It is among the most important biases that influence decision making. Ronayne et al. (2021a,b) find evidence of behavior consistent with the sunk cost effect and utilize eight questions that measure individuals' susceptibility to the sunk cost fallacy. We extend their research by examining whether a "pop culture" teaching intervention in principles of microeconomics lowers students' predisposition to the fallacy. We find that students become -14.95% less susceptible to the sunk cost fallacy after learning about it. We also observe that students who have taken economics previously exhibit lower susceptibility in all time periods.
Subjects: 
controlled experiment
empirical test
introductory economics
sunk cost fallacy
teaching economics
JEL: 
A20
A22
I21
Document Type: 
Working Paper

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