People’s behavior in Vegas often demonstrates the concept of entrapment/sunk costs. For example, someone might start the night with 100$ they’ve budgeted to spend gambling. Lets say that over the course of the next few hours he or she ends up with 200$, and thinking their luck will continue he or she might decide to continue gambling. Unfortunately, their lucky streak ends, and they slowly begin to lose some of the 100$ they had won. Rather than stopping gambling, he or she feels like they need to make back the money they’ve just lost! The more money they lose, the more motivated they are to end the night with 200$. After a few more hours the gambler has 20$ left and decides to make one last bet, this is their last chance to leave the casino as a winner! Alas, they lose the 20$ and have fallen pray to entrapment. That is, when people make an investment, be it time, money, or resources, they don’t want it to be in vain. In fact, we will commit more time, money, or resources in order to ensure the success of our initial investments. Ultimately, this can lead to conflict spiral, the tendency that conflicts will escalate rather than diminish (Brett et al., 1998; Rubin et al., 1994).
Additional factors that contribute to conflict escalation include: group polarization (Moscovici & Zavalloni, 1969), conformity (Sherif, 1936), the use of threats (Deutsch & Krauss, 1960), and negative perceptions of the “outgroup” that result from social categorization (McAlister et al., 2006).
Brett, J. M., Shapiro, D. L., & Lytle, A. L. (1998). Breaking the bonds of reciprocity in negotiations. Academy of Management Journal, 41, 410-424.
Deutsch, M., & Krauss, R. M. (1960). The effect of threat upon interpersonal pargaining. Journal of Abnormal and Social Psychology, 61, 181-189.
McAlister, A. L., Bandura, A., & Owen, S. V. (2006). Mechanisms of moral disengagement in support of military force: The impact of Sept. 11. Journal of Social and Clinical Psychology, 25, 141-165.
Moscovici, S., & Zavalloni, M. (1969). The group as a polarizer of attitudes. Journal of Personality and Social Psychology, 12, 125-135.
Rubin, J. Z., Pruitt, D. G., & Kim, S. H. (1994). Social conflict: Escalation, stalemate, and settlement. New York: McGraw-Hill.
Sherif, M. (1936). The psychology of social norms. New York: Harper.
Gambling is quite the trap. My family has a history of gambling problems so I know exactly what you're talking about, which is why I do not gamble. It's just not a wise economic decision. But, nice application of concepts. It helped put them in a more relatable and understandable perspective.
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