The sunk cost fallacy is when we make decisions about our current & future behavior or endeavor as a result of how much time, effort or money that we have put into an effort up to that point. In reality, it is irrational when our estimated future costs, in dollars, time or resources, exceeds the expected benefits. We fall victim to that delusion quite often.
It gets confusing, because we generally think of perseverance or grit as a good quality. However, like many character strengths it can have a dark side.
To overcome the fallacy, I would invite you to do an objective analysis that includes the future costs without the costs to date. That will require you to attain some emotional distance from your investments so far. Ask yourself; how would I advise my best friend to proceed based upon the objective future cost to benefit analysis?
Apply this simple technique and you can overcome an irrational bias that can waste lots of time, money and resources. This is a powerful technique to achieve great future success.
Just my opinion. What do you think? Let me know in the comments.
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