Sunk Cost: Keep Calm and Carry On

But what if this behaviour was not always a mistake—what if, in certain situations, this “fallacy” were actually an optimal decision-making strategy?

Human beings—even rational ones—have a limited capacity to remember the original reasoning behind their decisions. If that capacity is exceeded, the information could be lost—so we need a mental placeholder that can remind us of why we decided something, just as tying a string around your finger reminds you that you need to pick up milk on the way home from work. This kind of ad hoc “memory device” is called a mnemonic.