Putting a Human Name on an Investment Increases the Sunk Cost Fallacy

An intangible investment may be seen in a human way when it has a human name. We investigate whether a human name for an investment alters people’s inclination to succumb to the sunk cost fallacy. Previous research on the sunk cost fallacy has focused on demonstrating its existence; little is known about what characteristics of an investment make people more prone to its sunk cost. Across four experiments, we show that a human name for an investment increases sunk cost consideration when people make a decision to terminate the investment. This happens because people are more resistant to causing harm to humanized investments. We show that the name effect is specific to human names and does not extend to nonhuman names. Findings from our research can be used to better understand and manage consumer decision making regarding investments. It also suggests avenues for further research on the sunk cost fallacy