Sunk cost and fallacy effect

People demonstrate “a greater tendency to continue an endeavor once an investment in money, effort, or time has been made.” This is the sunk cost fallacy, and such behavior may be described as “throwing good money after bad”, while refusing to succumb to what may be described as “cutting one’s losses”. Sunk costs influence people’s decisions, with people believing that investments (i.e., sunk costs) justify further expenditures (wikipedia.org link)

Guy Champniss: Five ways great startups can fall victim to poor decision-making (linkedin.com link)

Steve Schlafman: The Dilemma of Sunk Costs in Venture Capital (medium.com link)

Cover art by: https://medium.com/@imranhashim86/avoiding-the-sunk-cost-bias-609113fadc6


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