While most of the evidence for the sunk cost fallacy comes fromindividual decisions, it may also influence the decisions of groups. In fact, it is sometimes referred to as theConcord fallacy, because the French and British governments continued funding the doomed supersonic airliner long after it...
Concept OverviewTheSunk Cost Fallacy, also known as the Concorde Fallacy or Escalation of Commitment, is a cognitive bias that occurs when individuals or organizations continue to invest resources (time, money, effort) into a project or decision despite evidence that it is unlikely to be successful...
Jenniferbuys$1,000 worth of Company X’s stock in January. In December, its value has dropped to $100 even though the overall market and similar stocks have risen in value over the year. Instead of selling the stock and putting that $100 into a differentstockthat is likely to rise in ...
which tends to be a rational thought process. Doing so means he falls into the Sunk Cost Dilemma. But if he chooses to overlook the sunk costs, he falls into thesunk cost trapor the sunk cost fallacy. This happens when he makes an irrational decision, one made without considering...
We see the sunk cost fallacy playing out across the world of innovation. The most famous example is Concorde, the supersonic passenger airline that was discontinued in 2003. From the beginning experts doubted the commercial viability of Concorde, and yet the British and French governments piled mo...