Sunk costs
The sunk cost fallacy refers to the idea that a person will often continue to invest resources such as time, money, or effort into a specific course of action, even if it is failing.
The sunk cost fallacy contribute to the status quo bias because the more a person invests in a status quo, the more likely they will continue to invest in it.
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The sunk cost fallacy
Humans are especially susceptible to the “sunk cost fallacy”—a psychological effect where we feel compelled to continue doing something just because we’ve already put time and effort into it.
But the reality is that no matter what you spend your time doing, you can never get that time ba...
Common Explanations for Status Quo Bias
These explanations are all irrational for preferring the status quo:
- Loss Aversion: When we make decisions, we weigh the potential for loss more heavily than the potential for gain.
- Sunk Costs: We continue to invest resources like time, mone...
11. Sunk Cost Fallacy:
People continue to invest in a decision or project based on the resources already committed, even when it's clear that further investment won't lead to better outcomes. For instance, you might keep pouring money into a failing business because you've already invested a significant amount.
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