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For example, anxious people face the stress brought about by the sunk cost fallacy. When stressed, they are more motivated to invest in failed projects rather than take additional approaches. Their report shows that the sunk cost fallacy will have a greater impact on people under high load conditions and people's psychological state and ...
Economists and behavioral scientists use a related term, sunk-cost fallacy, to describe the justification of increased investment of money or effort in a decision, based on the cumulative prior investment ("sunk cost") despite new evidence suggesting that the future cost of continuing the behavior outweighs the expected benefit.
For example, producing a quote based on a manager's preferences, or, negotiating a house purchase price from the starting amount suggested by a real estate agent rather than an objective assessment of value. Gambler's fallacy (aka sunk cost bias), the failure to reset one's expectations based on one's current situation. For example, refusing to ...
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]
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The "psychology of previous investment" was coined by James Howard Kunstler [1] to describe the sunk costs of the modern urban/suburban lifestyle.It is the reluctance to abandon technologies and standards of urban infrastructure into which humans have already made substantial investments, and is seen as a major contributor to modern energy crises.
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 ...
Biases can be distinguished on a number of dimensions. Examples of cognitive biases include - Biases specific to groups (such as the risky shift) versus biases at the individual level. Biases that affect decision-making, where the desirability of options has to be considered (e.g., sunk costs fallacy).