The purpose of this study is to explore how combined effect of feedback frequency
of investment performance and manager's affective commitment on reduction of the
sunk cost effect. To this end, we designed an experimental questionnaire to collect
data from production managers of electronics manufacturing companies listed on Taiwanese
stock markets and used a hierarchical regression model to examine the relationships
among variables. The results from 336 samples showed that just
considering performance feedback frequency or affective commitment does not necessarily
reduce the sunk cost effect. Only high feedback frequency jointed with high
affective commitment can suppress the willingness of manager to continue a disadvantageous
investment project.
