Sunk-Cost Effects Made Ancient Societies Vulnerable to Collapse

In this report we seek to unite these two explanations in a model that suggests why and under what conditions societies faced with resource degradation might “fail to adapt.” We are not peddling a new universal theory for societal collapse; we do hope to insert into the anthropological conversation on collapse a mechanism—little noticed to date—making some societies more vulnerable to collapse under certain conditions. Our model, which we illustrate with a simple mathematical characterization, is based on a well‐documented systematic deviation from rational decision making known as the “sunk‐cost effect” (Arkes and Ayton 1999). Rational‐choice theory tells us that one’s choice between options should be influenced not by prior investment but only by the expected future costs and benefits of those options. Of course, prior investment may affect the knowledge and experience of the decision maker, but such effects can be included in the rational‐choice theory explanation of decision making. Numerous studies (Arkes and Blumer 1985, Arkes and Ayton 1999, Teger 1980) nevertheless demonstrate that humans do consider prior investment in deciding what course of action to take.Janssen, Marco A., Timothy A. Kohler, and Marten Scheffer. (2003). Sunk-Cost Effects Made Ancient Societies Vulnerable to Collapse. Current Anthropology 44:722-728. (Preprinted as SFI 02-02-007.