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The sunk cost fallacy can cloud our judgment from "summary" of The Art of Thinking Clearly: Better Thinking, Better Decisions by Rolf Dobelli
Imagine you’ve already spent a significant amount on a project that is not going well. You’ve invested time, money, and effort into it. But deep down, you know it’s not the right path. However, instead of cutting your losses and moving on, you decide to keep going because of all that you have already put into it. This is the sunk cost fallacy in action. This cognitive bias clouds our judgment and leads us to make irrational decisions based on past investments that cannot be recovered. We feel compelled to continue investing in something simply because we have already invested so much, even when it no longer makes sense. The key to avoiding the sunk cost fallacy is to shift our focus from the past to the future. We need to evaluate our decisions based on their potential outcomes and not on what we have already invested. Just because we have already spent a lot on something does not mean we should continue down that path if it is no longer in our best interest. By being aware of this fallacy and actively working to overcome it, we can make better decisions and avoid wasting more resources on a lost cause. It takes courage to cut our losses and move on, but in the long run, it is the most rational and beneficial choice we can make.
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