Is time a cost? The sunk cost effect for investments of time and money

The expression “time is money” is well understood in the industrialized world. This equivalence suggests that the sunk cost effect should result from investments of either time or money. We compared the effects of investments of money or time on the sunk cost effect in four experiments. In the first two experiments, we found that investments of either time or money influenced current decisions in much the same way, consistently exhibiting a sunk cost effect. Participants chose to continue a project instead of canceling it after investments of either time or money. In the last two experiments, we offered participants an alternative choice of action. Instead of canceling the project, they could change it. This alternative reduced the frequency of sunk cost effects following an investment of money. Many participants opted to change the project. But the alternative had little effect on sunk cost effects after an investment of time.