sunk costs
Money already spent
Sunk costs are expenses already incurred that cannot be recovered.
The term appears most often in warnings against the sunk cost fallacy—the tendency to continue investing in something because of what you've already spent rather than what you'll gain: We've put so much into this project, we can't stop now.
Rational decision-making ignores sunk costs and considers only future returns.
Unable to be retrieved
- irrecoverableImpossible to regain
- fixed costsExpenses unchanged by output
- opportunity costsForegone alternative's value
- behavioral economicsPsychology of financial decisions
accounting · write-off · depreciation · amortization · capital loss · book value · salvage value
Wasting resources on failures
- cognitive dissonanceDiscomfort from contradictory beliefs
- loss aversionSetbacks sting more than gains please
- anchoringFastening securely to position
- mental accountingCategorizing money by source
entrapment · overcommitment · bygones · point of no return · chasing losses · emotional attachment · denial · rationalization
Absence of logic
- stubbornnessRefusal to yield
- perseveranceSustained resolve despite obstacles
- fixationPersistent mental attachment
- resistanceCapacity to withstand force
inertia · doggedness · intransigence · obstinacy · commitment · entrenchment · misjudgment · bias
Exit before further damage
- walk awayDepart from something
- quit while aheadLeave during success
- fresh startOpportunity to restart unburdened
- pivotPoint of rotation
nonrecoverable
Unable to be retrieved
- irrecoverableImpossible to regain
- fixed costsExpenses unchanged by output
- opportunity costsForegone alternative's value
behavioral economics · accounting · write-off · depreciation · amortization · capital loss · book value · salvage value
throwing good money after bad
Wasting resources on failures
- cognitive dissonanceDiscomfort from contradictory beliefs
- loss aversionSetbacks sting more than gains please
- anchoringFastening securely to position
mental accounting · entrapment · overcommitment · bygones · point of no return · chasing losses · emotional attachment · denial · rationalization · self-justification
irrationality
Absence of logic
- stubbornnessRefusal to yield
- perseveranceSustained resolve despite obstacles
- fixationPersistent mental attachment
resistance · inertia · doggedness · intransigence · obstinacy · commitment · entrenchment · misjudgment · bias · emotional reasoning
cut your losses
Exit before further damage
- walk awayDepart from something
- quit while aheadLeave during success
- fresh startOpportunity to restart unburdened
pivot · letting go · moving on · writing off
- lock-inlock-in, path dependence, entrenchment, irreversibility, network effects
- market economicsmonopoly, oligopoly, perfect competition, duopoly, monopsony
- cost analysisdirect costs, fixed costs, unit costs, operating expenses, operating expense
- cost accountingdirect costs, indirect costs, fixed costs, variable costs, overhead
- economicssupply and demand, inflation, GDP, GNP, gross domestic product
- futilityfutile, futility, in vain, pointlessness, vain