Sunk cost fallacy
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.
Defined in 2 GAGE programs, which carry 3 distinct definitions of it. The wording above is taught in Business AI Transformation.
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 7 topics of every program are free with a free account.
- Portfolio Prioritization and Resource Allocation · Strategic Roadmapping, Business AI Transformation
Terms it appears with
Not an alphabetical neighbourhood: these are the terms taught in the same lessons, ranked by how often they appear together.