The Psychology of Waste

Abstract

In order to avoid the appearance of wastefulness people may be motivated to make choices that compromise their own self-interest. In Experiment 1 subjects learned that Mr Munn didn't take advantage of a ‘three-pack’ which would have enabled him to see three movies for $12, the regular price being $5 per movie. Most subjects predicted that after having attended two movies at the regular price, Mr Munn would then be unwilling to purchase a ticket to attend a potentially enjoyable third movie, either because he would consider such a purchase to be wasteful or because he would be angry at having eschewed the ‘three-pack’. In Experiment 2 subjects who could use an obsolete product to ‘trade-up’ to a new model were more likely to buy the new model than were subjects who could purchase it at the identical low price. It was hypothesized that utilizing an obsolete product to obtain a new model would seem less wasteful than making an outright purchase of the new model. In Experiment 3 a large majority of subjects faced with a sunk cost situation persevered with the failing project if the alternative was selling the material ‘for its scrap value’. However, if the alternative consisted of selling the materials for an identical price to someone who could use them, then subjects were less likely to persevere with the failing project. Marketing implications and the propriety of retrospective evaluation of prior decisions were also discussed.

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