Sunk cost fallacy
From ACT Wiki
Project appraisal.
The sunk cost fallacy is the mistaken belief that already-committed costs ('sunk costs') are relevant for financial decision making.
In reality it is only the opportunity costs of resources that are relevant.
Consequences of the sunk cost fallacy include:
- Continuing with projects that should be discontinued, and "throwing good money after bad";
- Failure to close out loss-making market positions.