Psychoneuroendocrinology 137 (2022) 105632 Available online 15 December 2021 0306-4530/© 2021 Elsevier Ltd. All rights reserved. Sunk costs under stress: Acute stress reduces the impact of past expenses on risky decisions Stefan Schulreich a, 1, * , Lisa C. Dandolo a, b , Lars Schwabe a, 2 a Department of Cognitive Psychology, Faculty of Psychology and Human Movement Science, Universit¨ at Hamburg, Hamburg 20146, Germany b Department of Social Epidemiology, Institute of Public Health and Nursing Research, University of Bremen, Bremen 28359, Germany A R T I C L E INFO Keywords: Sunk costs Sunk-cost effect Decision making Risk Stress Cortisol ABSTRACT Rational choice should be guided solely by the prospects of available options. However, our decisions are often infuenced by irrecoverable past costs, even when the current course of action turns out to be unfavorable, refecting a cognitive bias known as the “sunk-cost effect”. In everyday life, many decisions are made under stress or elicit stress themselves. Whether and how stress impacts the sunk-cost effect, however, is not known. Based on evidence suggesting that the sunk-cost effect critically depends on the dorsolateral prefrontal cortex, which in turn is highly sensitive to stress, we hypothesized that stress may reduce the infuence of past expenses on current decisions. Participants underwent a psychosocial stress manipulation or control procedure, before we assessed their sunk-cost tendency in a monetary investment task. Overall, participants showed a pronounced sunk-cost effect, particularly for options with low expected value. Acute stress reduced this tendency to invest in risky options with low probability of success following high prior investments. Moreover, the strength of this reduction of the sunk-cost effect was predicted by individual cortisol reactivity. These fndings show that acute stress may reduce the impact of past expenses on current choice and that this effect may be mediated by glucocorticoid action. 1. Introduction We often consider irrecoverable past investments (e.g., money, time, or effort) when making decisions, although, according to expected utility theory, rational choice should only be based on future costs and benefts (Frank and Bernanke, 2006). Even when negative outcomes become apparent, we often stick to a failing course of action. This cognitive bias is known as the “sunk-cost effect” (Arkes and Blumer, 1985), is relatively robust (Roth et al., 2015) and might explain why people stay in unhappy relationships, dissatisfying jobs or why failing policies are kept alive. At a mechanistic level, neuroscientifc studies have suggested a critical involvement of the dorsolateral prefrontal cortex (DLPFC), which represents the norm not to waste resources and overrides rational choices based on expected values (Bogdanov et al., 2017; Haller and Schwabe, 2014). Many decisions are made under stress or elicit stress themselves. Acute stress can infuence decision making (Starcke and Brand, 2012) and modulate decision biases (e.g., increased refection effect in risky choice; Porcelli and Delgado, 2009). Whether stress modulates the sunk-cost effect, however, is currently unknown. The DLPFC is a target of major stress mediators, including glucocorticoids (mainly cortisol in humans), and DLPFC functioning can be impaired by acute stress (Arnsten, 2009; Bogdanov and Schwabe, 2016; Qin et al., 2009). Based on fndings suggesting that the DLPFC is a major driver of the sunk-cost effect and that stress may transiently reduce DLPFC functioning, we hypothesized that stress may reduce the infuence of past expenses on current decisions. To test this hypothesis, we assigned participants to either a psychosocial stress or a control condition before we assessed their susceptibility to past expenses in a monetary investment task. 2. Materials and methods 2.1. Participants and design Sixty-six participants (33f, 33m, mean age ± SD: 24.94 ± 3.99 years) participated in the study (for exclusion criteria and power analysis, see * Correspondence to: Department of Cognitive Psychology, Universit¨ at Hamburg, Von-Melle-Park 5, Hamburg 20146, Germany. E-mail address: stefan.schulreich@uni-hamburg.de (S. Schulreich). 1 ORCID iD 0000-0001-9708-1545 2 ORCID iD 0000-0003-4429-4373 Contents lists available at ScienceDirect Psychoneuroendocrinology journal homepage: www.elsevier.com/locate/psyneuen https://doi.org/10.1016/j.psyneuen.2021.105632 Received 27 October 2021; Received in revised form 11 December 2021; Accepted 13 December 2021