Sunk cost fallacy
The reasoning error of treating past investment in an option (time, money, effort already spent) as a reason to continue with that option, even when the evidence about the best path forward from today has changed. Corrected by evaluating only forward-looking costs and benefits, with past investment factored in only insofar as it reduces the switching cost of staying.
Defined in 2 GAGE programs, which carry 3 distinct definitions of it. The wording above is taught in Engineering Judgment and Professional Formation.
How each discipline defines it
The same term does different work depending on who is using it. These are the definitions as each program teaches them, unedited.
The reasoning error of treating past investment in an option (time, money, effort already spent) as a reason to continue with that option, even when the evidence about the best path forward from today has changed. Corrected by evaluating only forward-looking costs and benefits, with past investment factored in only insofar as it reduces the switching cost of staying.
The reasoning that past investment justifies continued investment. Money already spent is irrelevant to whether the next dollar is well spent; treating it as relevant is a leading cause of zombie tolerance.
A well-documented bias in behavioral economics in which past, unrecoverable investment (time, money, effort) is treated as a reason to continue a course of action, when a sound decision should weigh only the costs and benefits that remain ahead. Named because the invested resource is "sunk," meaning it cannot be recovered regardless of what is decided next.
Where it is taught
The exact lessons this term appears in. The first module of every program is free with a free account.
- Portfolio Prioritization and Resource Allocation · Strategic Roadmapping, Certified AI Transformation Professional (CATP)
- Making the right tradeoffs under real constraints · Engineering Thinking and Elegant Minimalism, Engineering Judgment and Professional Formation
- Evaluate and choose between two frameworks on the merits · Learning How to Learn, Engineering Judgment and Professional Formation
Where it shows up at work
A definition is where Sunk cost fallacy starts. The lessons above teach it inside the competencies below, which are what job descriptions ask for and what the GAGE credential records. Every link here is drawn from the same careers map that builds a role's readiness check.
Decides where AI should be used, where it should not, and which use cases create measurable value, tied to the organization's priorities.
One lesson on this page teach it as a primary outcome.
Writes requirements, runs a fair evaluation, pilots within limits, and refuses a demo as evidence.
One lesson on this page teach it as a primary outcome.
Roles that hire for it
Each role page shows the full competency set, what the seat decides, and a readiness check against your own evidence.
- Chief Information Officer, technology leadership editionneeds it at depth
- Chief AI Officerneeds it at depth
- Chief Technology Officer, AI engineering editionneeds working knowledge
- AI Vendor Risk Managerneeds working knowledge
- Third-Party AI Risk Analystneeds working knowledge
- AI Product Manager, responsible product editionneeds working knowledge · 3 open postings this week
How job descriptions say it
Postings rarely use the textbook word. These are the phrases the careers map reads as asking for the competencies above.
Where the frameworks place it: CISA software acquisition guidance.
One interview question about it
Fifty AI ideas are on the table. How do you pick the three worth doing, and how do you say no to the rest?
Asked of candidates for ai strategy and opportunity triage. Answering it in your own words is exactly how a GAGE topic is passed, and the credential records the pass where an employer can check it.
If you come from another field
Some backgrounds already carry this competency, and the readiness check gives credit for it.
- A business, MBA or technology management degree carries it as a claim to back up: Strategy and opportunity triage are the core of the degree.
Terms it appears with
Not an alphabetical neighbourhood: these are the terms taught in the same lessons, ranked by how often they appear together.