### abstract ###
the sunk cost fallacy is the tendency to continue an endeavour once an investment in money  effort  or time has been made
we studied how people's chronic orientation to cope with failing projects i e   action vs state orientation influences the occurrence of this sunk cost effect
we found that people with a state orientation  who have a tendency to ruminate about past events and have a hard time to let go of them  were especially prone to fall in the sunk cost trap
people with an action orientation  who more easily let go of past events  were not susceptible to the sunk cost effect
we discuss the implications of these results for the sunk cost fallacy literature
### introduction ###
it makes no sense to eat a dessert that you dislike  or pay a stock broker knowing that the money will be lost  right
yet  many people do exactly this  they make investments that will be in vain to prevent wasting earlier investments
having paid for a dessert  people thus feel they should finish it  even though the dessert is not to their liking  it would be a waste to  pay and not eat 
in a similar vein  people may be reluctant to sell their losing stocks  because by selling they would have to acknowledge that their prior investments were wasted
this tendency to honor prior costs by holding on to failing projects is called the sunk cost fallacy  CITATION
in more general terms  the sunk cost fallacy describes the tendency  to continue an endeavour once an investment in money  effort  or time has been made   CITATION
people regularly use sunk costs to justify further investments in many decisions  ranging from the decision to eat a dessert one has already paid for  CITATION  to the decision to continue research and development of already outperformed products  CITATION
this effect is not restricted to consumer behavior or economic decision making  but extends to many other decisions  including policy making
for instance  one of the important reasons to continue the war in iraq was to prevent acknowledging that soldiers who fell in battle died in vain
the sunk cost fallacy thus influences many decisions  from very mundane to highly exceptional  and affects all sorts of people ranging from customers in restaurants to the most important and influential leaders
from the above it is clear that people are likely to become victims of the sunk cost fallacy
however  one could wonder whether all people are equally likely to fall prey to this effect
some people seem to dwell more on the past than others
such differences in coping have been demonstrated in the extensive research on state versus action orientation
action-oriented people typically get over negative events quickly  and focus on taking action to solve them  while state-oriented people typically find it difficult to overcome a negative event  and keep ruminating about it and how it affects their current state  CITATION
this distinction seems highly relevant to the question of whether people differ in their susceptibility to the sunk cost fallacy
although prior investments like paying for a dessert  or buying stocks may not be seen as negative events  they may become negative if they are not compensated by current and future outcomes i e   if the dessert tastes horrible  and the stocks lose their value
the question then becomes how state and action-oriented people respond to those prospects  and how much they let their decisions be affected by prior investments
our proposition is that state-oriented people are more affected by prior investments
we argue that the more state-oriented people are  the more prone they are to see current decisions in the light of previous investments  thereby strengthening the association between the two events
the more action-oriented people are  the more likely they are to focus on the future and what they can achieve  thereby weakening the association between current decisions and previous investments
indirect support for this reasoning comes from research showing that the more action-oriented people are  the more they decouple missed opportunities in the past from related decisions they currently face  CITATION
with respect to the sunk cost fallacy  we expect that  compared to action-oriented people  state-oriented people are more influenced by previous investments when deciding about a current investment and hence that they are more likely to show the sunk cost fallacy
these predictions are particularly interesting in relation to prior reasoning in the action orientation literature
there  the assumption is often made that an action-oriented mindset increases the likelihood of finishing a project  CITATION
moreover  it is argued that it is against the nature of action-oriented people to quit an already started project  CITATION
at first sight  the present hypothesis seems to be at odds with this reasoning  as it predicts precisely the opposite
however  we argue that it is in line with these earlier studies in the sense that action-oriented people are expected to be more decisive than state-oriented people  and that they have an urge to take action to solve a failing situation
thus  in the case of sunk costs  applying this reasoning leads to the counterintuitive prediction that the more action-oriented people are  the more likely they are to quit the project they started investing in
put differently  we expect state-oriented people to be more likely to continue investing than action-oriented people
in order to examine this we presented participants a standard sunk cost decision scenario  CITATION  in which the presence or absence of a sunk cost was manipulated
we related participants' answers to their scores on the chronic action orientation measure that was assessed at an earlier occasion
we expected to find stronger sunk cost effects for state-oriented people than for action-oriented people
