Sunk Cost Fallacy
Throwing more in because we already threw a lot in.
"We've spent $20M; let's spend $5M more to feel better about the $20M."
What is Sunk Cost Fallacy? Throwing more in because we already threw a lot in. Portfolios bloated with bets no one would start today.
Five-year initiative kept alive purely because killing it 'wastes' the spend.
Portfolios bloated with bets no one would start today.
Legacy systems preserved because of integration cost, not value delivered.
Ask: 'If we were starting fresh, would we fund this?' Honor the answer.
Any project where the rationale starts with 'we've already spent…'
This term appears in this learning path
You bought a $200 concert ticket. Day of, you have the flu. Honestly:
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The full taxonomy entry
Every concept in the Atlas uses the same structure — so Sunk Cost Fallacy can be compared, recombined, and cited like an element on a periodic table.
- Business
- Leadership
- Government
- Healthcare
- Education
- Sales
- Marketing
- AI
- Negotiation
- Media
- Public Policy
- Relationships
- Where in our org would Sunk Cost Fallacy most often show up unnoticed?
- Which metric, ritual, or contract clause quietly rewards Sunk Cost Fallacy?
- If we removed every payoff for Sunk Cost Fallacy, what behavior would replace it?
- Who benefits when Sunk Cost Fallacy persists — and who pays the cost?
- People defend the status quo using the language of sunk cost fallacy.
- Decisions cluster around the easiest narrative rather than the strongest evidence.
- New data changes the slide deck but not the decision.
- Anyone naming the pattern is treated as the problem.
Every Atlas entry is a node in a knowledge graph. See the related rail below to follow the connections.
See Sunk Cost Fallacy through this lens
Each layer of the Incentives OS reframes this concept with its own thinkers, vocabulary, and diagnostic question.
Do you actually know Sunk Cost Fallacy?
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Which best describes Sunk Cost Fallacy?
Worked example, counter-example & concept map
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When you encounter Sunk Cost Fallacy, your prefrontal cortex has to do extra work to override the automatic response — and that override budget is finite.
Executive control, planning, impulse override, working memory, System 2. First thing to go offline under stress, fatigue, or low blood sugar. Why your 4pm decisions are worse than your 9am ones.
See Prefrontal in the Brain Atlas →Picked for you, from the Atlas
Ranked by shared learning paths, overlapping chips, and what you've saved.
Losses hurt roughly twice as much as equivalent gains feel good.
Spending disproportionate energy on trivial decisions.
Diffused responsibility means nothing happens.
We hunt for evidence that we were right all along.
A group decides on a course of action that nobody actually wants, because everyone assumes others prefer it.
Desire for conformity leads to irrational or dysfunctional decisions.
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More definitions to follow
Every term in the Atlas connects to a dozen others. Pick any of these and see where it takes you.
Prior solutions block better new ones.
Decompose a problem into estimable parts; multiply through.
Region-average rent subsidies inadvertently fund consolidation of poverty into resource-poor cores.
The combination of historical, social, and existential pressures that activates the next vMeme.
When OKRs are tied to comp, ambition disappears.
The sense of where the body is in space.
Trained skill of noticing micro-changes — breathing, skin tone, micro-expressions, voice tempo — in real time.
Cherry-picking data to fit a pattern after the fact.
Power tends to corrupt, and absolute power corrupts absolutely.
Disagreement grows more extreme as the parties think more about the issue.
Knowledge from someone who can recite the answers but doesn't understand them.
Working together has a cost that scales with the number of people.