Behavioral Evidence for Waste-Free, Personal and Interpersonal, Sunk Cost Effects

The sunk cost effect (SCE)—the tendency to persist in a failing course of action due to prior investments—has been well-documented in survey research, but behavioral evidence remains limited and inconsistent. Moreover, while recent studies suggest that people may also escalate commitment based on others’ prior investments, the so-called interpersonal sunk cost effect has yet to be tested behaviorally. To address these gaps, we developed a novel, fully controlled task and conducted two pre-registered experiments. In Experiment 1, participants were more likely to persist after personally investing effort, even under waste-free conditions. In Experiment 2, participants showed increased persistence when a partner had invested effort, providing the first behavioral evidence of the interpersonal SCE. Additionally, we observed an unpredicted main effect of social observation: participants were more likely to persist when they believed their decisions were visible to their partner, suggesting that reputational concerns may independently shape persistence behavior. Together, these findings challenge traditional self-justification and waste-aversion accounts and point instead to broader social and normative influences, including the role of commitment and public accountability in sunk cost sensitivity.