Choosing To Change Course: The Salience of Choice Increases Cognitive Flexibility and Reduces The Sunk-Cost Bias

Authors:

Abstract: Succeeding in volatile business environments requires cognitive flexibility—the ability to abandon old strategies and switch to new ones. Five studies identify a novel antecedent of cognitive flexibility: the salience of choice. The more salient choice was in people’s minds, the quicker they switched strategies under altered circumstances. Decision-makers were less likely to exhibit the sunk cost bias when the situation was framed as a choice. Highlighting the concept of choice did not make people less likely to undertake new opportunities in general, but only when sunk costs were incurred. Finally, in US states in which people used more choice-related words on www.google.com, residents exhibited more flexibility by voting for candidates from different political parties across various state-wide elections (i.e., in elections for the US president, senators, and the governor). Thus, the salience of choice can be harnessed to counteract some of the most pervasive and pernicious decision-making biases.

Track: DEC

Keywords: choice; cognitive flexibility; decision-making; problem-solving; sunk cost