The Sunk Investment Effect:

Many purchases are used in conjunction with another item that you purchased.

Think about:
- Gillette Razors
- Printer Ink Refills
- K-Cups

The investment made in those items are SUNK:
- Razor Handles
- Printers
- Keurig Machines https://twitter.com/thepricingdude/status/1311296478950891522

Your price sensitivity for products used with them is reduced.

This is the sunk investment effect,

which states that you will be less sensitive to the price of a

product the greater the sunk investment you've made

in anticipation of its continued use.

Whenever products are consumed in conjunction with

sunk complementary investments, the long-run price

sensitivity for those products will be greater than the

short-run sensitivity.

Think about it another way....

Gas prices are at an all-time low

You come up with the brilliant idea to purchase Hummer

during your mid-life crisis.

Gas prices sky-rocket during year 3 of ownership.

Your short-run price-sensitivity will be lower (i.e. you won't

run and sell the Hummer for a Toyota Prius).

However, if gas prices are expected to stay sky-high for

the next few years,

your long-run price-sensitivity will be higher and you will

begin to make plans on how to phase out your vehicle

choice.