The sunk cost effect
The sunk cost effect is the tendency to continue with a decision just because time, money or effort has been previously invested in it.
Definition
A sunk cost is an expense or effort that cannot be recovered. The error occurs when past inputs control a future decision more than current data and future consequences. This mechanism applies to finances, relationships, projects, learning and work: the more we put into something, the harder it is to admit that further investing may be irrational.
Key ideas
Missing key ideas.
Practice and life
Ask the question from scratch: If I had no previous costs today, would I choose this option again? If not, consider keeping your loss.
Common misunderstanding
It is a mistake to think: "If I have put in so much, I must continue." The second mistake is to confuse consistency with persistence.
Questions for self-reflection
No questions for self-reflection.
Sources
No sources.