Which One Was First? The Impact of the Purchase Order on the Sunk-Cost Effect

The impact of sunk costs on decision making is well researched in a variety of disciplines. Yet, we argue that previous studies may have overestimated the effect strengths by not accounting for the order, in which the decision maker obtains the high and low sunk cost alternatives. This paper uses two choice experiments with different designs to test for order effects. Thereby, we underline previous findings on the existence of the effect before we show that the sunk-cost effect is significantly affected by the order in which the individual receives the high sunk cost alternative.