Steelman
Sunk cost fallacy
Also called concorde fallacy, throwing good money after bad, escalation of commitment (related).
Continuing something only because of what you’ve already put into it.
What it is
Letting costs that have already been paid and can’t be recovered (money, time, effort) drive a decision about the future, instead of comparing the future costs and benefits of the options.
The pattern
We’ve already invested X in this. Therefore we should keep going.
An example
“I’ve already paid for the concert tickets, so we have to go, even though we’re both sick and it’s pouring with rain.”
The money is spent whether you go or not. The question is whether going tonight is better than staying home.
Why it fails
Sunk costs are gone whatever you decide next, so they shouldn’t tip the choice. The only relevant question is: from here on, which option gives the best result?
When it’s not a fallacy
Most lists skip this part. Calling a fair point a fallacy is a mistake too.
It can be fair when
- Past investment changes what’s left to do. A project that’s 95% built may cost little to finish; that’s about the remaining cost, not the sunk one.
- Quitting has real future costs, such as contract penalties or damage to your reputation.
Try one
A question from the app. The wrong answers are its usual look-alikes.
Family dinner. Zoe: “I hate accounting. The design studio offered me a paid apprenticeship, and it’s exactly the work I want to do.” Dad: “You’re two years and $60,000 into that degree. You finish what you started. The apprenticeship can wait. Ask the studio if they’d hold a spot for you.” Zoe: “They want an answer by Friday.” Dad: “Then you’ve got till Friday to think it over.”
What’s the flaw?
The two years and $60,000 are gone whether Zoe finishes or not. The real choice is between two more years of a degree she hates and work she wants now, and Dad decides it by what’s already spent.
A fair reply
“That $60,000 is spent either way, so the question is which of the next two years is better for her.”
Often confused with
- Gambler’s fallacy
Chasing losses often combines both: “I’ve lost too much to stop” (sunk cost) and “a win is due” (gambler’s fallacy).
Where the name comes from
A sunk cost is money, time or effort already sunk into something: spent and not coming back. “Concorde fallacy” is named for the supersonic passenger jet. “Throwing good money after bad” is the old saying: spending fresh money to rescue money that’s already lost. “Escalation of commitment” is the related habit of doubling down, step by step, on a failing plan.
Also called the Concorde fallacy, after the British and French governments kept funding the Concorde supersonic airliner long after it was clear there was no economic case for it.
Sources
- Sunk cost, Wikipedia
In the app
Practice spotting it on arguments that sound real.
Steelman has more examples of sunk cost fallacy, how to answer it in a real conversation, and practice rounds that mix it with its look-alikes, so you learn the difference, not just the name. Coming soon to iPhone and Android.
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