Sunk Cost Fallacy: Why We Stay in Bad Decisions Longer Than We Should

The sunk cost fallacy occurs when people continue investing time, money, or effort into something purely because they’ve already invested so much—even when abandoning it would be the rational choice. The past investment becomes the justification for future investment, even though the past cannot be recovered.

This bias traps people in failing projects, unhappy relationships, bad purchases, and unproductive habits. They fear that walking away means accepting defeat or “wasting” what they’ve already put in. But the real waste occurs when more resources are poured into something that no longer provides value.

The fallacy stems from emotional commitment. People identify with their choices, and abandoning them can feel like abandoning part of themselves.

The antidote is future-focused thinking: evaluating decisions solely on expected outcomes rather than past investment.