Sunk Cost Fallacy

If I spend fifteen dollars on this contest, I can win the prize. I can buy the prize elsewhere for five dollars. I have already spent eight dollars on the contest. Since I don't want the money to be wasted, I will continue.

The Sunk cost fallacy is when somebody has sacrificed and/or invested a great deal in a cause or project, they tend to become irrationally dedicated to it. This applies even when the costs invested can't be recovered. More of a cognitive bias than anything.

It's also known as:

• Foot in the door (in sales)
• Camel's nose (in social psychology)
• Throwing good money after bad (in business)
• Pot committed (in Poker, sometimes)
• Pay-or-play (in sports and entertainment)
• Pouring sand down a rat hole (usually in politics)

Compare Know When to Fold'Em.

Examples of Sunk Cost Fallacy include:

Film

• The Wet Bandits in Home Alone, before they learn that Kevin is home alone. After seeing that there is someone living at the McCallister house, they return every night, hoping this is the night that they won't see a light turned on.
• Thanos in the Marvel Cinematic Universe. As the writers have said, if Thanos was truly sincere about helping the universe combat resource shortages, he could use the Infinity Stones to generate infinite resources. But since Thanos has spent untold centuries halving planets' populations, succeeding by another method would completely invalidate everything he's been doing since he founded the Black Order. Though Word of God is that he's also Stupid Evil and is more concerned with proving to the ghosts of his people that his Insane Troll Logic was right, hence his sticking to this method.

Live-Action TV

• On Doctor Who, this is the Doctor's Fatal Flaw. When the Doctor gets an idea on how to fix the problem, that idea sticks in their head, blinding them to any other alternatives to the problem. It's been seen in "The Day of the Doctor" where the War Doctor misses the whole point of what the Moment is trying to show him, and the obvious third option right in front of him, because of how committed he is to his original Kill 'Em All plan. It takes Clara to give him a "You Are Better Than You Think You Are" speech to break up his latest pity party and allow him to see the more peaceful option.
  • Word of God offered this as an explanation for the general Idiot Plot in "The Brain of Morbius". If Morbius was so eager for a Time Lord body, then yes, Solon could have just put his brain in the Fourth Doctor's body and eliminated the biggest threat to Morbius in a moment. But he's spent so long stitching together a body for Morbius that he's going to finish it.
• This is the main conflict in the Star Trek: The Next Generation episode "The Ensigns of Command". The colonists have spent so long building the colony that they refuse to just up and leave, preferring to fight for it. After Data demonstrates how much a single phaser (which literally everyone in Starfleet has) can do on the ground, and asking them to imagine how much more powerful the guns needed for Death From Above would be, they agree to go with him.
• Michael in the Time Skip between the first two seasons of The Good Place. He has literally hundreds of reboots under his belt to prove that his Ironic Hell idea isn't viable but he still stick to it until his staff mutinies against him. Though in his defence, the penalty for failing is quite severe.

Western Animation

• Family Guy:
  • Brian Griffin tends to suffer from this. When he's presented with evidence that he fouled up or his position isn't as morally superior as he would like to think it is, he tends to double down on his initial idea.
  • Defied in "Peter's Daughter". Brian and Stewie realize they bit off more than they could chew by restoring a house and just blow it up, washing their hands of the project.
• Implied to be the case for Sera in Hazbin Hotel. If she gives Charlie's proposal the time of day, then she has to admit that the system she's been built is flawed and has allowed thousands of potentially redeemable sinners to suffer a Cessation of Existence. By the end of the first season, she has no choice but to confront this.

Real Life

• In psychology this is generally related to cognitive dissonance theory, which is basically the idea that when people think of themselves one way, but act in another way they will try to rationalize it. Specifically people think they make good decisions, but when the decisions aren't paying off, they throw more effort after it to make the decisions good rather than admit they made a bad decision.
• It's also known on social psychology as a great way to bring someone into a group. Cults are known for using this: How about you read a flyer? Sure, that cost nothing. Hey, why don't you answer this quiz on how happy you are with your life? Well... You've already read the flyer, that's not much more effort. How about going to a session?
• More serious (and much more complicated) in life or death matters. Dead troops are a sunk cost, but many nations across history have continued on losing military campaigns because their leadership could not face up to having wasted troops.
• This is often the reason people will spend lots of time on internet arguments, even after they're losing. Or as Scott Adams put it, "Nothing makes [someone] argue harder than being proven wrong."
  • Or even after it's obvious they are discussing with irrational fools that insult them rather than argue with them.
    • One of the games Internet trolls like to play is see how long they can string along their poor, furiously typing target(s).
• This is one of the main reasons why people continue to play MMOs even when they aren't enjoying them. It's arguable that MMO designers deliberately use this fallacy to encourage people to continue playing the game.
  • They're more likely to use a kind of Skinner Box and string along small rewards.
  • "Free-to-play" MMORPG games. After sinking substantial money into the game (to get powerups that nonpayers wouldn't have), the player feels compelled to continue, even when the grind is getting difficult. This is especially true of games that experience (or worse, levels) are lost for death. You pay up, or one lag-related death takes an enormous amount of experience. Despite getting to the point where even 0.10% experience takes hours while death loss takes only seconds, the player continues to play. It's actually worse in some ways than for subscription-based, since supposedly "nobody forced you to pay" (although the game itself may be balance-weighted toward payment, by making items scarce and leveling slow), making you feel personally committed rather than having paid what was effectively a usage cost.
• One use of the poker term "pot committed" is when a player continues to call with poor cards simply because they've already sunk a lot of money into the pot, even when there's no chance that they'll win.
  • By the way, even poker experts disagree on whether "pot committed" is really a thing, or how situational it is (e.g., does it matter how much everybody else has bet?). Be ready for debate if you just go around the poker community calling it a fallacy.
• One example of this is the dollar auction. An emcee decides to auction off a dollar with a starting bid of one cent (which may be adjusted for inflation) - but there's a catch. The high bidder gets the dollar, but the second-highest bidder still has to pay their bid and gets nothing. The bidding will start off with each of the bidders standing to profit, but once the high bid reaches 99 cents, the second bidder has to choose between losing 98 cents or bidding one dollar and making nothing. After this, the first bidder has to choose between losing 99 cents or bidding $1.01 and losing a cent. This process of bidding will continue even though neither side stands to gain from future bids.
• Happens in labour disputes where management or unions try to recoup the losses from a strike or lockout, and that merely pushes the bargaining positions of the parties further apart.
• Within sociology, the combination of this and My Girl Is Not a Slut often leads to girls feeling resigned to becoming sexually promiscuous after having had sex once. After all, they can only lose their virginity once and what does it matter after that?
• The Dutch public transport card system started out as a bad idea, turned out to be a worse idea, became a giant money sink, and still the government refused to just fess up and admit their mistake. A few years later, it's currently being debated as the worst thing that ever happened in the history of Dutch transport. Attempts by the government to just buy out the company responsible for the mess are still failing miserably.
• Stephen Colbert, on The Colbert Report, summed it up quite succinctly when discussing the American dilemma of whether torture was justified since it helped to capture and kill a hated terrorist. Stephen's usual Insane Troll Logic is applied to the point where, because America has already lost its beloved moral superiority by using torture, they have to keep torturing until it solves all of our problems, or:

"We must do whatever it takes to justify what we've already done."

• Supporters of The Vietnam War and the U.S. occupation of Iraq said that unless the U.S. continued the wars, the lives of soldiers who'd already died there would be wasted.
• This is extremely common in fandoms. Fans who initially loved a piece of media or a franchise will stick with it even after they no longer enjoy it; whether they don't like the direction the story's going, a character's development, every new installment for the last decade, new writers taking over and changing up too much, whatever the reason they'll keep following it and become more and more disappointed and disillusioned by it. But they've spent so many years in the fandom, tons of money on merchandise and the media itself, created fan works, had hours' worth of lengthy discussions with their friends that they can't bring themselves to admit they've lost interest and move on. Instead, they blame the media for changing.

Looks like this fallacy but is not:

• When abandoning the current plan has costs that outweigh the benefit of switching to a better plan; for example, a penalty clause for cancellation of a contract that is higher than simply paying the contracted price until the contract runs out. Cell phones and cable/satellite services, health clubs, and auto leases often have these. (For example, a cell phone contract is 2 years at $20.00 a month, and has a $250.00 cancellation penalty. If 12 months or fewer remain on the contract, it costs more to cancel than it does to simply continue paying the contracted amount until the contract expires.) Another example would be, if in the contest above, the person had spent $11 rather than $8. Assuming victory was certain at $15, continuing to play would be a reasonable decision. Continuing to play costs $4 more, making $15 total. Stopping after spending $11 and simply buying the prize elsewhere for $5 costs $16 total -- so why stop?
  • Or if the contest itself is something fun enough to be worth at least $2 in its own right. This is how things like carnival prizes work.
  • Or the contest is for charity, so even if you lose the money you spend is going to a good cause.
  • The above examples simply point out that the Sunk Cost fallacy should account utility, not merely abstract value. Let's return to the carnival game example, where the player had sunk $8 into the game, victory was sure at $15, and the prize was available for purchase for $5 at the store tomorrow. Should the player desire to give one's child/date a memento of the fun day at the carnival, an individual might decide quite rationally that the utility of acquiring the prize that day, at the carnival, for $7 was higher than getting it tomorrow for $5. As long as dollars are replaced with utility, the Sunk Cost fallacy is inescapable. Gain/loss of reputation, happiness at acquiring a good in a particular context, secondary effects (such as the charity example), and so on would all roll up into utility, which would be a better measure if it were not frequently subjective, and even when objective either hard or impossible to quantify.
  • It should be noted that in all these cases the sunk costs are still ignored, the utility of the prize is weighed against the $7 that still must be paid, not against the $8 that has already been sunk, etc.
• The relationship between military situations and this fallacy is rarely clear-cut. If you are close to a valuable objective then continued effort may be justified. If this decision was based on one's own sunk costs, it was at best Right for the Wrong Reasons.
  • This was long argued to be the main reason why Russia lost the Russo Japanese War. By the end of the war Japan was winning militarily, but its economy was stretched to the breaking point, and their mobilization resources were completely depleted, as they had started drafting kids and geezers into the army, with the predictable outcome for troops quality and morale. Some analysts say that had Russia pushed just for a couple of months more, even in the wake of the horrific losses like Tsushima and Mukden, Japan would've sued for peace. On the other hand the Tsar's government had really lousy intelligence and didn't know that, so they decided to cut their losses and sued first.
• When the possible return is so great compared to the possible loss that it is deemed a reasonable risk to take. That's gambling, not fallacious.
  • This works better with non-cumulative risks (like Lotto); otherwise, see pot committed above.