This award provides funding for laboratory experiments conducted by coPI Collin Weigel under the supervision of Prof. Stanley Reynolds. The experiments test the effects of clear economic incentives on individual decision making in dynamic environments. Research in psychology and marketing suggests that people tend to continue on a course of action once they have sunk resources into their decisions, and that people continue even when it is no longer rational to do so. The experiments test the hypothesis that a clearly defined environment and clear economic incentives correct this tendency.
Previous scholars have argued that because people stick with their course of action once they have 'sunk' resources, it is very difficult to change such a course of action. This has been used as the basis for marketing campaigns and for efforts to encourage the adoption of new technologies. The new research funded by this award may result in new insights about how to market innovative products.
