History Main / SunkCostFallacy

20th Oct '16 1:42:53 PM Josef5678
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** [[WarGames Interesting game. The only winning move is not to play.]]

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** [[WarGames [[Film/WarGames Interesting game. The only winning move is not to play.]]



* Parodied in [[http://www.angryflower.com/smashi.html this]] ''Webcomic/BobTheAngryFlower'' strip.

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* %%* Parodied in [[http://www.angryflower.com/smashi.html this]] ''Webcomic/BobTheAngryFlower'' strip.



** Utility also explains why sometimes our "irrational" choices are not always irrational at all. For example, suppose that in my small American town, a local drug dealer is taken by a customer for about $200 USD, so he goes to the customer's house and assaults him viciously. The possible consequences of the assault could send the dealer to jail for years - so it seems so foolhardy. An armchair economist would look at it and say, "Cut your losses; it's a sunk $200, and risking serious charges over it is stupid." But the drug dealer is part of the black market. He can't go to law enforcement to enforce his property rights over his stuff. A reputation for being easy to con or being unwilling to punish theft could make him easy prey for another criminal. Thus, when weighing the risks against $200 USD and his ''reputation'', and when using the ''dealer's'' value system, the choice is no longer irrational. When accounting utility, always look at it from the decision-maker's values and preferences.

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** Utility also explains why sometimes our "irrational" choices are not always irrational at all. For example, suppose that in my a small American town, a local drug dealer is taken by a customer for about $200 USD, so he goes to the customer's house and assaults him viciously. The possible consequences of the assault could send the dealer to jail for years - so it seems so foolhardy. An armchair economist would look at it and say, "Cut your losses; it's a sunk $200, and risking serious charges over it is stupid." But the drug dealer is part of the black market. He can't go to law enforcement to enforce his property rights over his stuff. A reputation for being easy to con or being unwilling to punish theft could make him easy prey for another criminal. Thus, when weighing the risks against $200 USD and his ''reputation'', and when using the ''dealer's'' value system, the choice is no longer irrational. When accounting utility, always look at it from the decision-maker's values and preferences.
11th Oct '16 11:34:38 AM chc232323
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This trope is not merely Bob's commitment to a course of action because he's invested too much to turn back. If Bob has already made the down payment on a house, for example, he is likely to continue in the purchase of that house since he would lose money for no gain if he stops. In order for a situation to be the Sunk Cost Fallacy, it must be one where (1) Bob remains committed to a course of action in order to justify what he has already spent on it and (2) it is obvious to any rational person that the longer he stays, the more he will lose.

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This trope is not merely Bob's commitment to a course of action because he's invested too much to turn back. If Bob has already made the down payment on a house, for example, he is likely to continue in the purchase of that house since he would lose money for no gain if he stops. In order for a situation to be the Sunk Cost Fallacy, it must be one where (1) Bob remains committed to a course of action in order to justify what he has already spent on it and (2) it is obvious to any rational person that the longer he stays, the more he cost of staying in ''now'' will lose.
exceed the cost of simply stopping now, taking on the loss, and moving on.
25th Sep '16 11:54:54 AM MarsJenkar
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** The Hubble Space Telescope is a good example of why additional costs after the fact aren't necessarily this trope. When the telescope was first deployed, there was a major flaw in the primary optical mirror; it has been ground to the wrong curve, making the images it sent back very blurry, and rendering the primary purpose of the telescope (clearer images outside Earth's atmosphere) mostly pointless. Some people quickly wrote off Hubble as a failure at that point, so when a mission to send up a new module to correct for the bad optics was announced, these people slammed NASA for throwing more money into a telescope they thought would never work properly. The fact was, NASA knew ''exactly'' what was needed to correct for the issue, thanks to documentation of the process used to grind the mirror, which was ground ''very precisely'' to the wrong shape. Long story short, the corrective module was sent up to (and installed in) the telescope, and afterwards, new images from Hubble were incredibly clear, as had been envisioned at the start of the project. The money spent to correct the optical issues (a relatively small amount compared to the overall cost of the telescope) proved to be money well-spent, and Hubble is still in service--and providing great imagery--as of 2016.

to:

** The Hubble Space Telescope is a good example of why additional costs after the fact aren't necessarily this trope. When the telescope was first deployed, there was a major flaw in the primary optical mirror; it has been ground to the wrong curve, making the images it sent back very blurry, and rendering the primary purpose of the telescope (clearer images outside Earth's atmosphere) mostly pointless. Some people quickly wrote off Hubble as a failure at that point, so when a mission to send up a new module to correct for the bad optics was announced, these people slammed NASA for throwing more money into a telescope they thought would never work properly. The fact was, NASA knew ''exactly'' what was needed to correct for the issue, thanks to documentation of the process used to grind the mirror, which was ground ''very precisely'' to the wrong shape. Long story short, the corrective module was sent up to (and installed in) the telescope, and afterwards, new images from Hubble were incredibly clear, as had been envisioned at the start of the project. The money spent to correct the optical issues (a relatively small amount compared to the overall cost of the telescope) proved to be money well-spent, well-spent...and more to the point, the repair cost a fraction of the money that building a completely new telescope would have, for most of the same benefit (one of the telescope's original modules had to be removed for the corrective module to be installed). Hubble is still in service--and providing great imagery--as of 2016.
25th Sep '16 11:40:42 AM MarsJenkar
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** The Hubble Space Telescope is a good example of why additional costs after the fact aren't necessarily this trope. When the telescope was first deployed, there was a major flaw in the primary optical mirror; it has been ground to the wrong curve, making the images it sent back very blurry, and rendering the primary purpose of the telescope (clearer images outside Earth's atmosphere) mostly pointless. Some people quickly wrote off Hubble as a failure at that point, so when a mission to send up a new module to correct for the bad optics was announced, these people slammed NASA for throwing more money into a telescope they thought would never work properly. The fact was, NASA knew ''exactly'' what was needed to correct for the issue, thanks to documentation of the process used to grind the mirror, which was ground ''very precisely'' to the wrong shape. Long story short, the corrective module was sent up to (and installed in) the telescope, and afterwards, new images from Hubble were incredibly clear, as had been envisioned at the start of the project. The money spent to correct the optical issues (a relatively small amount compared to the overall cost of the telescope) proved to be money well-spent, and Hubble is still in service--and providing great imagery--as of 2016.
17th Sep '16 7:23:37 PM The_Pyro_Jawsome
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**ChurchOfHappyology is infamous for this,what with having to fork over $100,000 in the ''first fucking year''.
14th Aug '16 7:02:16 PM MsChibi
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* Gambling addictions usually fall into this trope. While people who are hooked on gambling are hooked on the rush of risking everything to win big, other addicted gamblers will gladly keep blowing money on a game until they can win back everything they lost just because they already lost money in the first place. For example, if someone were to lose $5000 in a game, they will keep spending money on that game until they can win back that $5000 plus the additional money spent to get back the initial losses. In other words, "I already invested so much money in this game, I may as well keep playing until I can win everything back." Overlaps with GamblersFallacy, because obviously a losing streak means you have to win something soon, maybe the very next game.

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* [[TheGamblingAddict Gambling addictions addictions]] usually fall into this trope. While people who are hooked on gambling are hooked on the rush of risking everything to win big, other addicted gamblers will gladly keep blowing money on a game until they can win back everything they lost just because they already lost money in the first place. For example, if someone were to lose $5000 in a game, they will keep spending money on that game until they can win back that $5000 plus the additional money spent to get back the initial losses. In other words, "I already invested so much money in this game, I may as well keep playing until I can win everything back." Overlaps with GamblersFallacy, because obviously a losing streak means you have to win something soon, maybe the very next game.
1st Jul '16 10:06:14 PM Eps05
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-> '''Villager :''' A lot of people gave very selflessly to build this warship so we can go out and battle the Vikings. But the time has come to admit that hard work and hope are no substitute for actual knowledge. And that we've made a really shitty ship. If we sail this ship against the Vikings, we'll be massacred immediately. I suggest we break it up for scrap and never speak of it again.
-> '''Other Villager :''' Throw away months of work? Fuck that! Let's fight! ''[crowd cheers]''
->''[cue burning ship]''
-> '''Vikings :''' [incredulous] Seriously, how does a boat just catch fire by itself?
-->-- WebComic/{{Oglaf}} "[[http://oglaf.com/bilge/ Bilge]]"

8th Apr '16 6:35:34 PM ProfN
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* It's also known in 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?

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* It's also known in 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? session? Once the new recruit has spend hundreds, if not thousands of dollars on seminars and training, they are unlikely to be willing to go cold turkey; cognitive dissonance becomes involved (as quitting would require admitting to themselves that they were duped, which is something no one wants to think about themselves).
25th Mar '16 7:07:17 PM eroock
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!!'''[[http://en.wikipedia.org/wiki/Sunk_costs#Loss_aversion_and_the_sunk_cost_fallacy Sunk cost fallacy]]''':

A cognitive bias that causes Bob to remain committed to a course of action because he's already spent time or resources on it, even though the commitment is irrational (i.e. he would be better off walking away). When Bob is engaging in this fallacy, he will remain set on the course of action even if the profit from his success would be less than what he's already spent.

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!!'''[[http://en.[[http://en.wikipedia.org/wiki/Sunk_costs#Loss_aversion_and_the_sunk_cost_fallacy Sunk cost fallacy]]''':

A
fallacy]] is a cognitive bias that causes Bob to remain committed to a course of action because he's already spent time or resources on it, even though the commitment is irrational (i.e. he would be better off walking away). When Bob is engaging in this fallacy, he will remain set on the course of action even if the profit from his success would be less than what he's already spent.



!!! Also called

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!!! !! Also called



!!!Examples:

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!!!Examples:!!Examples:
12th Feb '16 1:15:34 PM Andyroid
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* Reacher Gilt's scam in ''Discworld/GoingPostal'' relies heavily on this. Even as the service on the Grank Trunk semaphore line gets worse and worse, he sweet-talks investors and board-members into "throwing good money after bad" while pocketing most of it and covering it up with tricky accounting and corporate buzzwords like "embracing diversity" and "synergistically".

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* Reacher Gilt's scam in ''Discworld/GoingPostal'' relies heavily on this. Even as the service on the Grank Grand Trunk semaphore line gets worse and worse, he sweet-talks investors and board-members into "throwing good money after bad" while pocketing most of it and covering it up with tricky accounting and corporate buzzwords like "embracing diversity" and "synergistically"."synergistically". [[BoxedCrook Not-quite-reformed con artist]] Moist von Lipwig is equal parts impressed and [[EvenEvilHasStandards disgusted]] when he realizes what Gilt is up to.
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