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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 ]
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.
[73] (see also Sunk cost fallacy) Pseudocertainty effect, the tendency to make risk-averse choices if the expected outcome is positive, but make risk-seeking choices to avoid negative outcomes. [74] Status quo bias, the tendency to prefer things to stay relatively the same. [75] [76] System justification, the tendency to defend and bolster the ...
This could be because of the sunk-cost fallacy. ... a ton about economics to get it. “The sunk-cost fallacy refers to the tendency humans have to continue investing in a failing endeavor even ...
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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 ...
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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