Our paper is the first study that explores the determinants of cost stickiness from the perspective of real-option theory，which can integrate the other extant theoretical explanations． Based on the real option theory，the management fails to execute the abandonment options effectively when sales decline，and the extant resource allocation will mismatch with the changes in operating volume，therefore leading to cost stickiness． Using A-share data in China from 1999 to 2012，our empirical results show that industry competition can improve the execution efficiency of abandonment options． That is，fierce industry competition can prompt the management to adjust resource allocation effectively in response to changes in operating volume，thereby reducing the cost stickiness． Further analyses find that the impact of industry competition on the cost stickiness is stronger for firms with higher growthes，in industries with better prosperities，and in periods of macroeconomic expansion． Our paper not only provides the evidence about economic consequences of industry competition on the execution of real options，but also helps to understand the black box of cost management behaviors．