Sunk Cost Fallacy

I stumbled across an article that fed into this term. Like so many things in our lives, it was unknown...or so I thought. As I read it shone light unto a phenomenon that is definitely around us everyday and during our decision-making processes.

Remember those times when you felt that you have invested too much money, time, effort, love, or some other personal resource that you cannot go back. You feel that if you go back that you will lose all that you have invested.

Sunk cost means that you have irreversibly spent the resource and it is irretrievable. What you get back will be another resource... different money etc. Many-a-times though we know deep down that the odds of getting back what we have spent is very small or not even there. We cling to hope; we are blinded by pride.

Some mental accounting will let you realize that what is left for you to spend will only continue increasing your losses. The decision is sometimes hard but it is up to you to make it.

I look at our Belizean lives and felt that we are definitely guilty of this fallacy. It is a part of our being human. Also, it is important for us to be able to decide when enough has been spent on an item/section/event in our life and say no more.

I am sure we have all battled with decisions. The angle here is "Will the continued investment be worthwhile and allow us to get back even what has been spent?"

Maybe we will be satisfied that we will get back something but the loss is often hidden in stress, anguish and time. This is what makes it a sunk cost fallacy.

Has the same root as the spanish word 'fallar.'