Sunk Cost Fallacy - Deepstash
Sunk Cost Fallacy

Sunk Cost Fallacy

Any student of economics knows this basic rule, which states that rational agents should not take irrecoverable or “sunk” costs into account when making decisions about present or future investments. Nevertheless, human beings break this rule all the time, succumbing to a cognitive bias known as the “sunk-cost fallacy.”

If you have ever sat through a bad movie because you did not want to “waste” the money you paid for the ticket or finished a PhD program you lost interest in years ago because of all the work you had already done, you have made this mistake.

26

454 reads

CURATED FROM

IDEAS CURATED BY

camille_aa

Mental health is health. Meditation nerd.

The idea is part of this collection:

How to Run an Effective Meeting

Learn more about economics with this collection

How to set clear objectives

How to follow up after a meeting

How to manage time effectively

Related collections

Similar ideas to Sunk Cost Fallacy

The sunk cost fallacy

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...

The Sunk Cost Fallacy In Business

When running a company, many entrepreneurs fail to quit, change direction or pivot their business model, unable to admit that what they were doing isn’t working, or that they were plain wrong in their decisions.

The Sunk Cost Fallacy is the primary reason for this gross error in ju...

The Sunk Cost Fallacy

We want to finish what we've started because of previously invested resources, even if it is better to quit and use our limited resources elsewhere for better returns.

What you can do about it:

  • Every decision has two costs...

Read & Learn

20x Faster

without
deepstash

with
deepstash

with

deepstash

Personalized microlearning

100+ Learning Journeys

Access to 200,000+ ideas

Access to the mobile app

Unlimited idea saving

Unlimited history

Unlimited listening to ideas

Downloading & offline access

Supercharge your mind with one idea per day

Enter your email and spend 1 minute every day to learn something new.

Email

I agree to receive email updates