Are these kids just being stupid? That's the conventional explanation: They're not thinking, or by the work-in-progress model, their puny developing brains fail them. Yet these explanations don't hold up. As Laurence Steinberg, a developmental psychologist specializing in adolescence at Temple University, points out, even 14- to 17-year-olds—the biggest risk takers—use the same basic cognitive strategies that adults do, and they usually reason their way through problems just as well as adults. Contrary to popular belief, they also fully recognize they're mortal. And, like adults, says Steinberg, "teens actually overestimate risk." So if teens think as well as adults do and recognize risk just as well, why do they take more chances? Here, as elsewhere, the problem lies less in what teens lack compared with adults than in what they have more of. Teens take more risks not because they don't understand the dangers but because they weigh risk versus reward differently: In situations where risk can get them something they want, they value the reward more heavily than adults do. A video game Steinberg uses draws this out nicely. In the game, you try to drive across town in as little time as possible. Along the way you encounter several traffic lights. As in real life, the traffic lights sometimes turn from green to yellow as you approach them, forcing a quick go-or-stop decision. You save time—and score more points—if you drive through before the light turns red. But if you try to drive through the red and don't beat it, you lose even more time than you would have if you had stopped for it. Thus the game rewards you for taking a certain amount of risk but punishes you for taking too much. When teens drive the course alone, in what Steinberg calls the emotionally "cool" situation of an empty room, they take risks at about the same rates that adults do. Add stakes that the teen cares about, however, and the situation changes. In this case Steinberg added friends: When he brought a teen's friends into the room to watch, the teen would take twice as many risks, trying to gun it through lights he'd stopped for before. The adults, meanwhile, drove no differently with a friend watching.

http://ngm.nationalgeographic.com/print/2011/10/teenage-brains/dobbs-text (emphasis added)http://online.wsj.com/article/SB10001424052970203806504577181351486558984.html

EDIT: "What's Wrong With the Teenage Mind?", WSJ:

Recent studies in the neuroscientist B.J. Casey's lab at Cornell University suggest that adolescents aren't reckless because they underestimate risks, but because they overestimate rewards—or, rather, find rewards more rewarding than adults do. The reward centers of the adolescent brain are much more active than those of either children or adults. Think about the incomparable intensity of first love, the never-to-be-recaptured glory of the high-school basketball championship.

What teenagers want most of all are social rewards, especially the respect of their peers. In a recent study by the developmental psychologist Laurence Steinberg at Temple University, teenagers did a simulated high-risk driving task while they were lying in an fMRI brain-imaging machine. The reward system of their brains lighted up much more when they thought another teenager was watching what they did—and they took more risks.

...Simply increasing the driving age by a year or two doesn't have much influence on the accident rate, for example. What does make a difference is having a graduated system in which teenagers slowly acquire both more skill and more freedom—a driving apprenticeship. Instead of simply giving adolescents more and more school experiences—those extra hours of after-school classes and homework—we could try to arrange more opportunities for apprenticeship. AmeriCorps, the federal community-service program for youth, is an excellent example, since it provides both challenging real-life experiences and a degree of protection and supervision. "Take your child to work" could become a routine practice rather than a single-day annual event, and college students could spend more time watching and helping scientists and scholars at work rather than just listening to their lectures. Summer enrichment activities like camp and travel, now so common for children whose parents have means, might be usefully alternated with summer jobs, with real responsibilities.

EDITEDIT: http://pss.sagepub.com/content/19/7/650.short

Soman (2004) offered loss aversion as a potential explanation for the sunk-cost fallacy. Supporting evidence comes from research in which young adults have reported that their sunk-cost decisions are motivated by loss avoidance (Frisch, 1993). This focus on losses may reflect younger adults' negativity bias in information processing. Younger adults weigh negative information more heavily than positive information (Baumeister, Bratslavsky, Finkenauer, & Vohs, 2001). In contrast, older adults demonstrate a positivity effect (Carstensen & Mikels, 2005). Their decisions reflect a more balanced view of gains and losses (Wood, Busemeyer, Koling, Cox, & Davis, 2005). If older adults are less likely than younger adults to focus exclusively on losses, and loss aversion contributes to the sunk-cost fallacy, then older adults may be less likely than younger adults to commit the sunk-cost fallacy.