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In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered. [ 1 ] [ 2 ] Sunk costs are contrasted with prospective costs , which are future costs that may be avoided if action is taken. [ 3 ]
This could be because of the sunk-cost fallacy. It’s a term borrowed from the finance world, but you don’t have to know a ton about economics to get it. “The sunk-cost fallacy refers to the ...
Escalation of commitment, irrational escalation, or sunk cost fallacy, where people justify increased investment in a decision, based on the cumulative prior investment, despite new evidence suggesting that the decision was probably wrong. G. I. Joe fallacy, the tendency to think that knowing about cognitive bias is enough to overcome it. [65]
These elements were then used to find a backward solution on 537,045 auctions. The greater accuracy may be explained by the new model having the ability to correct for two behavioral irrationalities: The sunk cost fallacy and average auctioneer revenues above current retail price.
The sunk-cost problem helps explain why it was so hard to end that war. It is worth considering this problem as we reflect on current wars. The sunk-cost fallacy applies in our thinking about the ...
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Naturalistic fallacy fallacy is a type of argument from fallacy. Straw man fallacy – refuting an argument different from the one actually under discussion, while not recognizing or acknowledging the distinction. [110] Texas sharpshooter fallacy – improperly asserting a cause to explain a cluster of data. [111]
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