The Effect of Counterfactual Thinking on the Sunk Cost Effect

Counterfactual thinking is helpful to comprehend the mistakes made previously and to move toward by proposing future actions to facilitate the success of self-regulation. The sunk cost effect rationalizes a strategy, which is the aim of studies on decision-making. However, few of them have discussed the influence of counterfactual thinking to the sunk cost effect. This study assumes that downward counterfactual thinking can regulate the unhappy mood at the moment for relief, which may reduce the sunk cost fallacy; upward counterfactual thinking, on the contrary, emphasizes the improvement of future behaviors, which may increase the sunk cost fallacy.