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The sunk cost fallacy is a cognitive bias that affects decision-making. The term ‘sunk cost’ means that the ‘investment’, whether in the form of money, time, energy, etc are already gone. and cannot be recovered, regardless of any action.
Human has the tendency to continue investing resources for the particular topic, even though we ourselves know it is better to just let it go and cut loss. The past investments are influencing our decisions.
A few examples in everyday life:
- There is a newly opened fancy burger shop in the street. You were hungry and bought a triple cheese burger. When you bit it you found that it taste like xxx! Now what? Just finish it…since you already paid for it. You need to get your money worth, since the cost was sunk. It doesn’t feel good to throw away the money.
- Choosing a wrong major in the university is quite common in the society, since normal people do not really know what they want, or they just follow the majority to choose the popular course. After sometimes into the study and we found that we don’t like it at all, or even hate it, but due to high investment already made (time, and money), most people…
