Purpose The purpose of this paper is to develop a systematic literature review on
the sunk cost effect from consumers’ perspectives. By applying a comprehensive approach,
this paper aims to synthesise and discuss the impact of financial and behavioural
sunk costs on consumers’ decisions, judgements and behaviour before and after purchasing.
This study also identifies potential research avenues to inspire further studies.
Design/methodology/approach Following a search in the Scopus and Web of Science databases,
a systematic literature review was conducted by identifying and analysing 56 peer-reviewed
articles published between 1985 and 2022 (November). Descriptive and content analysis
was implemented based on the selected papers to examine and synthesise the effect
of sunk costs on consumers’ choices, evaluations and actions in a comprehensive approach;
uncover research gaps; and recommend paths for future research. Findings The research
results found in the literature are discussed according to five related themes: factors
affecting the sunk cost effect; the impact of past investments on purchasing decisions;
consumers’ post-purchasing evaluation, behaviour and choices; the mental amortisation
of price; and the sunk cost effect on loyalty and switching. Originality/value The
originality of this study lies in the comprehensive approach to the sunk cost effect
from consumers’ perspectives. This review paper synthesises and discusses the research
results found in the literature related to financial and behavioural sunk costs that
can influence consumers’ decisions, judgements and behaviour before and after paying
for a good or service.
