History Main / SunkCostFallacy

* 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 them $15. Stopping after spending $11 and simply buying the prize elsewhere costs $16 -- the $11 already spent on the contest plus the $5 to buy the prize.

** This was long argued to be the main reason why Russia lost the RussoJapaneseWar. 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've started drafting kids and geezers into the army, with the predictable outcome for troops quality and morale. Some analysts say that had the 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 ''[[WhatAnIdiot didn't know that]]'', so they've decided to [[KnowWhenToFoldEm cut their losses]] and sued first.

* How about the story of the camel's nose, seeing as it's used as an alternative name for this? A man is camping for the night on his journey through the desert, and his poor camel is outside in the cold of a desert night. "Please, sir," it begs, "it's so cold out here. Could I just poke my nose into your nice warm tent?" "Sure," says his master, "what harm could that do?" And the camel does, and he shuts up for a little while. But then: "Please, sir, it's still ever so cold. Might I just place my entire head in your tent?" And again the man relents, since he's already let the nose in. Then: "Please, sir. It continues to be excruciatingly cold out here. Can I drag my neck in as well?" And, yes, again, the man agrees. And before the man knows what's happened, he's lying outside in the cold and the camel's hogging the tent. Also sometimes cited as an example of the slippery slope fallacy, as the moral given is usually something along the lines of "don't give an inch or they'll take a mile".

** See pot odds above.

** Also, it might well be that reinforcing a loosing battle might be preferable than any other potential outcome, particularly if not doing so would lead to a rapid collapse. This was part of the reason why the Western Allied forces tasked with guarding the evacuation beaches in 1940 fought on long after their positions became highly untenable: they were buying time for everybody else to escape and fight again.
* 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 fallaciousness.

* A particularly tragic example of this -- with much higher stakes -- can be found in ''The OrderOfTheStick: Start of Darkness''. And in fact, following his MyGodWhatHaveIDone moment in the main comic, Redcloak does it ''again''. He seems to like it.

* The relationship between military situations and this fallacy is rarely clear-cut. If the enemy is near or at their breaking point in morale, equipment, or reinforcements, a decision to keep pushing them may work. In cases like this, the fallacy lies in assuming that it will work this time because it worked before.

**** No it's not, you're ABSOLUTELY WRONG!

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

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

* 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.

*** One of the games [[((Troll}} Internet trolls]] like to play is see how long they can string along their poor, furiously typing target(s).

** or even after its obvious they are discussing with irrational fools that insult them rather than argue with them

** or even after its obvious they are discussing with irrational fools

:: When somebody's sacrificed 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.