Sunk cost fallacy - Revision history

imported>Doug Williamson: Expand definition.

2021-08-07T01:14:29Z

Expand definition.

← Older revision		Revision as of 01:14, 7 August 2021
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	Consequences of the sunk cost fallacy include:		Consequences of the sunk cost fallacy include:
	*Continuing with projects that should be discontinued;		*Continuing with projects that should be discontinued, and "throwing good money after bad";
	*Failure to close out loss-making market positions.		*Failure to close out loss-making market positions.

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	* [[Incremental cash flows]]		* [[Incremental cash flows]]
	* [[Opportunity cost]]		* [[Opportunity cost]]
			* [[Project appraisal]]
	* [[Stop-loss limit]]		* [[Stop-loss limit]]
	* [[Sunk costs]]		* [[Sunk costs]]

imported>Doug Williamson: Add link.

2020-11-16T11:22:05Z

Add link.

← Older revision		Revision as of 11:22, 16 November 2020
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	== See also ==		== See also ==
	* [[Cognitive bias]]		* [[Cognitive bias]]
			* [[Incremental cash flows]]
	* [[Opportunity cost]]		* [[Opportunity cost]]
	* [[Stop-loss limit]]		* [[Stop-loss limit]]

imported>Doug Williamson: Update 2nd sentence.

2020-03-31T14:56:11Z

Update 2nd sentence.

← Older revision		Revision as of 14:56, 31 March 2020
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	In reality it is only the opportunity ~~cost~~ of resources that is relevant.		In reality it is only the opportunity costs of resources that are relevant.

imported>Doug Williamson: Add link.

2020-03-31T14:53:18Z

Add link.

← Older revision		Revision as of 14:53, 31 March 2020
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	In reality it is only the opportunity cost of resources that is relevant.		In reality it is only the opportunity cost of resources that is relevant.


			Consequences of the sunk cost fallacy include:
			*Continuing with projects that should be discontinued;
			*Failure to close out loss-making market positions.


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	* [[Cognitive bias]]		* [[Cognitive bias]]
	* [[Opportunity cost]]		* [[Opportunity cost]]
			* [[Stop-loss limit]]
	* [[Sunk costs]]		* [[Sunk costs]]

imported>Doug Williamson: Simplify description.

2020-03-31T14:51:19Z

Simplify description.

← Older revision		Revision as of 14:51, 31 March 2020
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	''~~Cognitive bias~~''.		''Project appraisal''.

	The sunk cost fallacy is the ~~tendency of individuals and organisations to be more likely to continue with a project if they have~~ already ~~invested a lot of money, time, or effort in it, even when continuing is not the best thing to do~~.		The sunk cost fallacy is the mistaken belief that already-committed costs ('sunk costs') are relevant for financial decision making.

	~~This is sometimes known as "throwing good money after bad".~~

			In reality it is only the opportunity cost of resources that is relevant.
	~~One antidote to this tendency~~ is ~~to appreciate~~ that ~~"sunk costs don't count" in rational decision-making~~.


	== See also ==		== See also ==
	* [[Affinity bias]]
	* [[Bandwagon bias]]
	* [[Behavioural economics]]
	* [[Choice supporting bias]]
	* [[Cognitive bias]]		* [[Cognitive bias]]
	* [[~~Confirmation bias]]~~		* [[Opportunity cost]]
	* [[Emotional intelligence]]
	* [[Objectivity]]
	* [[Optimism bias]]
	* [[Self-investment bias]]
	* [[Social bias]]
	* [[Sunk costs]]		* [[Sunk costs]]

imported>Doug Williamson: Create page. Source: Cambridge dictionary: https://dictionary.cambridge.org/dictionary/english/sunk-cost-fallacy

2020-03-27T10:30:18Z

Create page. Source: Cambridge dictionary: https://dictionary.cambridge.org/dictionary/english/sunk-cost-fallacy

New page

''Cognitive bias''.

The sunk cost fallacy is the tendency of individuals and organisations to be more likely to continue with a project if they have already invested a lot of money, time, or effort in it, even when continuing is not the best thing to do.

This is sometimes known as "throwing good money after bad".

One antidote to this tendency is to appreciate that "sunk costs don't count" in rational decision-making.

== See also ==
* [[Affinity bias]]
* [[Bandwagon bias]]
* [[Behavioural economics]]
* [[Choice supporting bias]]
* [[Cognitive bias]]
* [[Confirmation bias]]
* [[Emotional intelligence]]
* [[Objectivity]]
* [[Optimism bias]]
* [[Self-investment bias]]
* [[Social bias]]
* [[Sunk costs]]

[[Category:Commercial_drive_and_organisation]]
[[Category:Influencing]]
[[Category:Self_management_and_accountability]]
[[Category:Working_effectively_with_others]]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Financial_products_and_markets]]