By: steve-wang
The Sunk Cost Fallacy where people continue investing time, money, or effort into something because they've already invested a lot. This fallacy is very difficult avoid because the person has already invested too much which will connect this to their ego, how people around them view them. Furthermore, people feel the pain of lost of material more than the pleasure of gained of material. These things added together will make people invest even more resources. An example of of someone fall into the Sunk Cost Fallacy is, when someone gambles and has lost a lot of money. They continue because it would be shameful to leave after losing a lot of money and the money they lost worsens their financial situation. They might also not want to seem like a loser. Another example might be someone who tries to start a business but has already lost a lot of money. They will not stop investing because it would be a disgrace to have people know that your business failed and have a lot less money then before. They also do not want to be seen as a failure. I have fallen into the sunk cost fallacy before too when I broke something and tried to fix it by myself. When I tried to fix it and failed, I realised it would cost more money to order more parts to try again rather than to just buy a new one. However, I still bought more parts because I did not want to “admit defeat”.