sunk cost fallacy
Irrecoverable expense reasoning
The sunk cost fallacy is the tendency to continue investing in something because of what you've already spent, rather than cutting losses.
The reasoning goes: I've already put so much into this relationship, or We can't abandon the project after spending three million dollars.
But past expenditures—of money, time, or effort—are irrecoverable regardless of future decisions.
Rational choice considers only future costs and benefits, not what's already gone.
- regretSorrow over past actions
- commitmentFirm pledge to act
- investmentDeploying capital for returns
- trapDevice for catching animals
- in too deepUnable to extricate oneself
loss · throwing · good money after bad · money · pit · waste · dead horse · escalation · too far gone · point of no return · stubbornness · perseverance · gambling · doubling · down · attachment · ego · pride
- behavioral economicsloss aversion, nudge, anchoring, cognitive bias, heuristics
- cognitive biasesconfirmation bias, anchoring bias, negativity bias, framing effect, optimism bias
- gambling psychologyloss aversion, illusion of control, chasing losses, near miss, cognitive bias
- investment pitfallsovertrading, panic selling, overleveraging, overconfidence, poor timing
- logical fallaciesstraw man, ad hominem, red herring, false dilemma, false analogy
- thinking errorsad hominem, straw man, slippery slope, confirmation bias, false dilemma
sunk cost fallacycost-benefit analysis
Systematic comparison of advantages, disadvantages
rational choice · letting go · walking away · strategic withdrawal
sunk cost fallacystrategic withdrawal
Calculated military retreat
fail fast · pivot · graceful exit · walking away · letting go
sunk, cost, fallacy, sinks, sunken, costs, costing, costly, costless