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  2. Escalation of commitment - Wikipedia

    en.wikipedia.org/wiki/Escalation_of_commitment

    Confirmation bias can also lead to escalation of commitment as individuals are then less likely to recognize the negative results of their decisions. [7] On the other hand, if the results are recognized, they can be blamed on unforeseeable events occurring during the course of the project. The effect of sunk costs is often seen escalating ...

  3. Sunk cost - Wikipedia

    en.wikipedia.org/wiki/Sunk_cost

    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 ]

  4. List of cognitive biases - Wikipedia

    en.wikipedia.org/wiki/List_of_cognitive_biases

    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]

  5. What Is Sunk Cost? - AOL

    www.aol.com/news/2013-04-03-sunk-cost-definition...

    Alamy There are some economic terms most of us know and understand, such as supply and demand. And there are other terms we will probably never even run across, like implicit logrolling and a ...

  6. Cognitive bias mitigation - Wikipedia

    en.wikipedia.org/wiki/Cognitive_bias_mitigation

    Gambler's fallacy (aka sunk cost bias), the failure to reset one's expectations based on one's current situation. For example, refusing to pay again to purchase a replacement for a lost ticket to a desired entertainment, or, refusing to sell a sizable long stock position in a rapidly falling market.

  7. Decision-making - Wikipedia

    en.wikipedia.org/wiki/Decision-making

    Framing bias: This is best avoided by increasing numeracy and presenting data in several formats (for example, using both absolute and relative scales). [73] Sunk-cost fallacy is a specific type of framing effect that affects decision-making. It involves an individual making a decision about a current situation based on what they have ...

  8. Theory of the firm - Wikipedia

    en.wikipedia.org/wiki/Theory_of_the_firm

    This grows worse with firm size and more layers in the hierarchy. Empirical analyses of transaction costs have attempted to measure and operationalize transaction costs. [5] [27] Research that attempts to measure transaction costs is the most critical limit to efforts to potential falsification and validation of transaction cost economics.

  9. Signalling (economics) - Wikipedia

    en.wikipedia.org/wiki/Signalling_(economics)

    A costly signal in which the cost of an action is incurred upfront ("ex ante") is a sunk cost. An example of this would be the mobilization of an army as this sends a clear signal of intentions and the costs are incurred immediately. When the cost of the action is incurred after the decision is made ("ex post") it is considered to be tying hands.