The sunk cost fallacy

The sunk cost fallacy is a cognitive bias that occurs when individuals continue to invest in a decision or action because they have already invested resources (time, money, effort, etc.) into it, even if continuing to do so is no longer rational or in their best interest. This bias can lead to irrational decision-making and can result in individuals wasting resources on projects or decisions that should be abandoned.

An example of the sunk cost fallacy would be a company continuing to invest in a new product line that is not selling well, simply because they have already invested a significant amount of money into developing it. Despite the fact that the product is not generating any revenue and is unlikely to do so in the future, the company may continue to invest in it because they have already invested so many resources into it.

Another example of sunk cost fallacy is when a person has purchased a non-refundable concert ticket, but later find out that they cannot attend the concert. They might choose to attend the concert even if they are not interested in the concert or performer because they have already invested in the ticket.

Paraphrased, the sunk cost fallacy is a cognitive bias where people persist in a decision or action because they have already invested resources into it, even if continuing to do so is no longer rational or beneficial. This can lead to irrational decision-making and wasting of resources on projects or decisions that should be abandoned. An example of this might be a company continuing to invest in a failing product line because they have already invested so much into it, or a person attending a concert they are not interested in just because they have already purchased a ticket