Sunk cost fallacy
The habit of throwing more resources at something because you have already thrown so many.
2 min read
Reviewed by Shariq Refai, MD, MBA, FAPA. Verify: ORCID, Wikidata, NPI Registry, all links.
A sunk cost is time, money, or effort you already spent that cannot be recovered no matter what you decide next. The rational way to decide going forward is to look at future costs and future benefits. The sunk cost fallacy is the habit of counting the already-spent cost as a reason to keep going, when it should have no bearing on the choice.
How it plays out
Finishing what you started
Sitting through a movie you are not enjoying because you already paid. The ticket is gone either way. Your evening does not have to go with it.
The career detour
Staying in a field you no longer want because you spent years training for it. Those years are not returned by more years.
The stalled project
Pouring money into a plan that is not working because so much has already gone in. New money is a new decision.
In relationships
Staying because of the years together rather than because the relationship is working now. Longevity is not evidence, and neither is investment.
In treatment
Staying with a therapy or medication that has not helped because so much time has been spent trying. Every additional week has to earn its keep on its own terms.
How to use this page
- Ask this question: if I were arriving fresh today, with no prior investment, would I choose to continue? If the honest answer is no, the past is not a reason to stay.
- Separate the sadness of loss from the logic of the decision. It is possible to grieve the sunk cost and still make the right forward move.
- Make the choice explicit rather than drift into more of the same. Drift favors the fallacy.
Worth knowing
The sunk cost fallacy is often defended as loyalty or persistence. Sometimes it is those. More often it is a reluctance to admit that a previous decision did not pan out. Naming it clearly separates values-driven persistence from cost-driven inertia.
Named and studied in behavioral economics from the 1980s onward. Documented across humans, and also, tellingly, in nonhuman animals.
See also on ShrinkDaily
- ShrinkDaily's daily concept on sunk cost fallacy
For a three-minute daily read on the same idea, see ShrinkDaily's daily concept on sunk cost fallacy.
How to cite this page
- Short
Sunk cost fallacy. Shrinkopedia, medically reviewed by Shariq Refai, MD, MBA. https://shrinkopedia.com/library/sunk-cost-fallacy/- APA
Shrinkopedia. (n.d.). Sunk cost fallacy. Medically reviewed by Shariq Refai, MD, MBA. https://shrinkopedia.com/library/sunk-cost-fallacy/- MLA
"Sunk cost fallacy." Shrinkopedia, https://shrinkopedia.com/library/sunk-cost-fallacy/.
Click a citation to select it.