Sunk Cost Fallacy: Why We Keep Investing in What’s Already Failing
You stay in the relationship because of the years you’ve put in. You finish the book you hate because you’re already halfway through. You keep pouring money into a struggling project because you’ve already spent so much.
That’s the sunk cost fallacy.
It’s the mistake of honoring past investment more than future outcome. And it’s one of the most emotionally sticky traps in human reasoning.
What This Bias Is
The sunk cost fallacy is a cognitive distortion where we continue investing time, money, or energy into something—not because it’s working, but because we’ve already invested so much.
We confuse commitment with value.
We confuse persistence with wisdom.
And we throw good resources after bad, trying to redeem the irredeemable.
Real-Life Examples of the Bias in Action
Careers: Staying in a profession you dislike because you’ve already spent years getting the degree or climbing the ladder.
Relationships: Holding onto an unhealthy or stagnant relationship because of how long you’ve been together.
Business: Continuing to fund a product or project that consistently underperforms because of what’s already been spent.
Entertainment: Finishing a terrible movie because you already paid for the ticket.
Daily Life: Driving miles out of the way to use a coupon, even if the savings don’t justify the time or gas.
Why It Matters
The sunk cost fallacy keeps us stuck—in careers, commitments, conflicts, and financial holes. It masquerades as loyalty or grit, but it’s often just fear of loss and ego-protection.
It prevents course correction: We feel obligated to stick with bad decisions, even when better options exist.
It distorts value: We start evaluating outcomes based on what we’ve already spent, rather than what we could still gain or lose.
It drives escalation: We double down on poor investments, often making the loss worse.
It triggers shame avoidance: Admitting something’s not working can feel like admitting failure, so we pretend it will work eventually.
The Psychology Behind It
The sunk cost fallacy is rooted in emotional reasoning, not logical analysis. It thrives on discomfort with waste and a deep attachment to our past efforts.
Loss Aversion
We feel losses more intensely than gains, so we avoid admitting we’ve lost anything—even to ourselves.Cognitive Dissonance
When reality doesn’t match our beliefs (“This project will succeed”), we rationalize instead of reevaluating.Ego Investment
The more effort or identity we’ve poured into something, the harder it is to detach. Quitting feels personal.Social Image
We don’t want to look inconsistent or foolish, so we keep going—sometimes for appearances more than logic.
How to See Through It (Bias Interrupt Tools)
Ask: “If I weren’t already involved, would I still choose this?”
This reframes the decision based on current value, not past investment.Shift from past-focus to future-focus
Make decisions based on potential returns, not sunk costs. Ask what the next hour, dollar, or choice is worth.Name the fear
What are you afraid it would mean if you quit? Failure? Waste? Disappointment? That fear is driving the bias.Use outside perspective
Would you advise a friend to keep going? The distance often brings clarity.Recognize the pain of detachment is temporary
Letting go feels bad—for a moment. But continuing often makes it worse over time.
Related Biases
Loss Aversion: Overweighing potential losses compared to gains.
Status Quo Bias: Preference for maintaining the current state, even when it’s not beneficial.
Confirmation Bias: Seeking reasons to support staying the course while ignoring red flags.
Final Reflection
The sunk cost fallacy whispers that walking away is failure.
But wisdom is knowing when to stop digging.
Persistence isn’t always noble. Sometimes it’s just inertia with better branding.
Letting go isn’t wasteful—it’s strategic.
The bravest decisions aren’t about fighting harder.
They’re about deciding what’s still worth fighting for.