The Money Fit Show · Season 1, Episode 1
Scams and the Role of Sunk Cost Theory
Why can an obvious scam become harder to walk away from after someone has already invested a little money, time, or hope? Dale Dixon joins Todd Christensen to examine the psychology behind that question and the role sunk cost thinking can play in keeping people engaged with a scam.
Scams and the Role of Sunk Cost Theory
Play Season 1, Episode 1 directly through Spotify without leaving Money Fit.
Why walking away from a scam can get harder over time
Scam victims do not come from one educational, financial, or social background. In the first full episode of the Money Fit Show, Dale Dixon of the Better Business Bureau talks with Todd Christensen about some of the human biases scammers can exploit and why knowing that a situation looks suspicious does not always make someone immune to it.
A central part of the discussion is sunk cost theory. Once someone has already put money or effort into something, walking away can feel like admitting that the earlier investment was wasted. A scammer can use that tendency by beginning with a relatively small request and gradually raising the stakes.
Topics covered in this episode
Dale and Todd explore how scam tactics can interact with ordinary human decision-making rather than relying on the idea that only careless people become victims.
- Who falls for scams and why victims come from many different backgrounds.
- The human biases and decision-making tendencies that scammers can exploit.
- How sunk cost theory can make it harder to abandon a scheme after someone has already invested something.
- How sophisticated, or surprisingly unsophisticated, scam operations can be.
- Why an initial request may be small before the scammer begins asking for much more.
- How the sunk cost effect can show up in ordinary situations such as concert tickets.
- How lottery-ticket spending can illustrate similar sunk cost thinking.
- The relationship Dale describes between sunk cost bias and motivated cognition.
- Todd's thoughts on being cautious with calls from unfamiliar numbers.
Falling for a scam is not an intelligence test
One of the themes of this conversation is that scammers can work against ordinary human tendencies. Recognizing those tendencies can be more useful than assuming a scam would always be obvious in the moment.
Dale Dixon
Dale Dixon joined the inaugural Money Fit Show episode from the Better Business Bureau to discuss scam psychology, consumer decision-making, and the biases scammers may use to keep victims engaged. At the time of the episode, Dale was identified as a BBB Chief Innovations Officer.
