1. The Foreign Language Effect on The Sunk-Cost Fallacy
with English-Chinese Bilinguals
Shiny Choi

2. Introduction

3. The Foreign Language Effect
People tend to make more rational decisions When they reason in a foreign language than in a native language

4. The Framing Effect!!
Half-full??
Half-Empty??

5. Asian Disease Problem Gain Expected Values
Recently, a dangerous new disease has been going around.
Without medicine, exactly 600,000 people will die from it.
In order to save these people, two types of
medicine are being made.
If you choose Medicine A, exactly 200,000 people will be saved.
If you choose Medicine B, there is a 33.3% chance that exactly 600,000 people will be saved and a 66.6% chance that no one will be saved.
Which medicine would you choose?
A? B?
Expected Values
Medicine A = 100% X 200,000 = 200,000
Medicine B = 33.3% X 600, % X 0
= 200,000

6. Asian Disease Problem Loss Expected Values
Recently, a dangerous new disease has been going around.
Without medicine, 600,000 people will die from it. In order to save these people, two types of
medicine are being made.
If you choose Medicine A, exactly 400,000 people will die.
If you choose Medicine B, there is a 33.3% chance that no one will die and a 66.6% chance that exactly 600,000 people will die.
Which medicine do you choose?
A? B?
Expected Values
Medicine A = 100% X 400,000 = 400,000
Medicine B = 33.3% X % X 600,000
= 400,000

8. Why?
gain
loss
>

9. Keyser, Hayakawa & An (2012)

10. The Sunk-Cost Fallacy A Sunk Cost : a cost that has already been paid
and cannot be recovered
Sunk Cost Bias/Effect/Fallacy :
People find it hard to abandon their past investment and
Continue investing although the past investment does not
influence on the future outcome

11. The Sunk-Cost Scenario
Invest
No-Invest
As the president of an airline company, you have invested 10 million dollars of the company’s money into a research project. The purpose was to build a plane that would not be detected by conventional radar, in other words, a radar-blank plane. When the project is 90% completed, another firm begins marketing a plane that cannot be detected by radar. Also, it is apparent that their plane is much faster and far more economical than the plane your company is building. The question is: should you invest the last 10% of the research funds to finish your radar-blank plane?
Yes No
As president of an airline company, you have received a suggestion from one of your employees. The suggestion is to use the last 1 million dollars of your research funds to develop a plane that would not be detected by conventional radar, in other words, a radar-blank plane. However, another firm has just begun marketing a plane that cannot be detected by radar. Also, it is apparent that their plane is much faster and far more economical than the plane your company could build. The question is: should you invest the last million dollars of your research funds to build the radar-blank plane proposed by your employee?
Yes No

12. Hypothesis 1:
When using a second language, participants will be less affected by the framing effect
(Gain Vs. Loss) than when they use their native language, and show a more even distribution of decisions.
Hypothesis 2:
When using a second language, participants will be less affected by the sunk cost effect
(Investment Vs. No Investment) than when they use their native language, and show a more even distribution of decisions.

13. Method

14. Participants
82 native-Chinese speakers were recruited from Carleton College and St. Olaf College
52 from Carleton (36 women, 16 men)
30 from St. Olaf (18 women, 12 men)
2 participants were excluded
Average score for English fluency level was 7.5 (1-10)
Received $2 per person as compensation
Experiment took approx. 15 min

15. Back to Back Translation
English → Chinese → English

16. Set 1 Set 2 Set 3 Set 4 Set 5 Set 6 Set 7 Set 8
10 participants
5 female
5 male
English
Gain version
Invest version
Set 2
4 female
6 male
Loss version
No-invest version
Set 3
6 female
4 male
Set 4
7 female
3 male
Set 5
Chinese
Set 6
8 female
2 male
Set 7
Set 8
Table 1. The composition of each handout

17. Results
&
Discussion

18. Hypothesis 1
The foreign language effect was successfully replicated in the present study:
The framing effect was reduced when the problem was presented in the foreign language, which is consistent with the conclusion reached by Keysar et al. (2012)

19. Hypothesis 2
No significant difference was found between the decisions made in the native language and the foreign language;
People wanted to continue their investment on top of the past investment.
The foreign language effect was not present

20. Conclusions & Future study

21. Conclusions Future Study
The present study supports the theory that using a foreign language reduces the cognitive bias coming from the framing effect during decision-making processes
The present experiment did not find that the foreign language effect helps people to be less influenced by their past investment, sunk costs, when making decisions
More research on the foreign language effect on the sunk cost bias
With different languages
With different scenarios
Because only once done
More quantity needed to be valid

22. Thank You!!