Studying the Sunk Cost Effect in Engineering Decision Making with Serious Gaming

One potential cause of project cost overrun is due to sunk costs. The sunk cost effect is a behavioral phenomenon where decision makers tend to continue a course of action, even an inferior one, if there has been a prior investment of resources in that course of action. In this paper, we study the sunk cost effect and the influence of decision framing on outcomes in an engineering decision-making context. We adopt an approach to human-studies by utilizing computer-enabled serious gaming as a platform to immerse subjects into a design scenario. Through an exploratory study encompassing two experiments, we find that decision framing as well as game mechanics influence subjects’ susceptibility to the sunk cost effect. Decisions framed as either-or type questions and allowing subjects to test stated claims seem to mitigate the sunk cost effect.