Gerhard and Marta each set a New Year's goal to lose 20% of their body weight by June. They both bought six-month memberships to a gym. By June, Marta lost only 10% of her body weight. However, Gerhard lost 25% of his body weight in the first four months, but he kept working out at the gym since he had paid for six months of membership. Gerhard is an example of
A) attention to sunk costs because he kept going to the gym even after he reached his goal because he had paid for the membership.
B) overconfidence, since he exceeded his goal.
C) a framing bias, since he felt trapped into continuing to go to the gym.
D) overvaluing the present relative to the future because he was motivated by his progress.

Question

Quizplus · Accepted Answer

Gerhard's decision to continue using the gym despite having already achieved his goal is an example of attention to sunk costs. He is influenced by the fact that he had already paid for the membership, which is a cost that cannot be recovered, rather than making a decision based on his current needs or goals.

Gerhard and Marta Each Set a New Year's Goal to Lose