The Role of Project Completion Information in Resource Allocation Decisions

Abstract

Prior studies have suggested that “sunk costs,” the amount of money already invested in a project, influence resource allocation decisions but have often confounded sunk costs with the degree to which a project is completed. To address this issue, we varied information about both sunk costs and project completion in two experiments. Our results suggest that degree of project completion may dominate any sunk cost effects that are present in resource allocation decisions.