Psychology
What is The sunk cost fallacy?
The sunk cost fallacy is the tendency to keep investing in something just because you've already put time, money, or effort into it — even when quitting would be the better choice. We feel we can't 'waste' what's already spent.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains the sunk cost fallacy.
Key things to understand
- 1We stick with things because of past investment.
- 2Already-spent costs ('sunk costs') can't be recovered.
- 3It leads to throwing good resources after bad.
- 4Good decisions weigh future value, not past cost.
Frequently asked questions
- What is the sunk cost fallacy?
- Continuing something because of what you've already invested, rather than its future value.
- What's an example of the sunk cost fallacy?
- Finishing a bad movie just because you paid for the ticket, instead of doing something you'd enjoy more.
- How do you avoid the sunk cost fallacy?
- Base decisions on future costs and benefits, ignoring money or time you can't get back.