The Effect Of Psychological Distance On Sunk Cost Effect

In actual life decision-making,people often make many irrational decisions,sunk cost effect is one of them.Based on the theory of explanatory level,three dimensions of psychological distance(time distance-space distance-social distance)were studied.The subjects were randomly assigned to each dimension to participate in the experiment.The effects of each dimension of psychological distance on individual sunk cost effect and its internal mechanism were discussed.In this study,students from Shanghai Normal University were selected as subjects to conduct an experimental study,which included two experiments.Experiments 1 included six small experiments.Researchers compared the differences of individual sunk cost effects between short-distance and long-distance psychological distance by using two different types of sunk cost effects: monetary sunk cost effect and behavioral sunk cost effect.Experiments 2 also included six small experiments to examine the mediating effect of anticipated regret on different types of sunk cost effects of psychological distance.Based on the results of the two experiments,the following conclusions are drawn:1.The time distance and social distance dimension of psychological distance have significant influence on the cost effect of monetary sunk,but the influence of spatial distance on it is not statistically significant.For the cost effect of behavioral sunk,the three dimensions of psychological distance-time distance,space distance and social distance have significant effects.2.Expected regret plays an intermediary role between time distance and cost effect of monetary sunk.Expected regret also plays the same role between space distance,social distance and cost effect of monetary sunk,and between time distance,social distance and cost effect of behavioral sunk.However,the mediating effect of anticipated regret is not obvious when we study the mechanism of spatial distance on the cost effect of behavioral sunk.Further discussion shows that in the face of sunk cost situation,the manipulation of psychological distance can increase the individual's expected regret to a certain extent,thereby reducing its performance of sunk cost effect.For example,in the problems of gambling addiction and irrational money or behavioral investment,using new media and other tools to publicize the negative impact of irrational behavior in the near future,in the near future or around people,can enhance the individual's expected regret,thereby reducing the individual sunk cost effect.