A field guide to the ways reasoning breaks
Values and premises
Also called Concorde fallacy, escalation of commitment
Letting money or effort already spent justify continuing, when only future returns matter.
We have spent two years on it, so we must finish.
Ask what you would decide if you were starting from today with nothing spent.
Hal Arkes and Catherine Blumer documented the effect in 1985 ('The Psychology of Sunk Cost') as the tendency to keep investing once money, effort, or time has been spent. It is also called the Concorde fallacy, after the British and French governments that kept funding the supersonic jet long after its commercial case had collapsed.
The startup has burned eighteen months and two funding rounds on a feature nobody uses, and the board approves a third because 'we're too far in to stop now'.
A reader finishes the thousand-page fantasy series they stopped enjoying at book two, because abandoning it now would waste the first eight hundred pages.
In the meeting about the failing contractor, the project lead argues to keep them through phase three — 'we've already trained them on our systems'.
He holds the losing stock from $40 down to $4, telling his broker he 'can't sell at a loss' — as if the $36 were still on the table to be recovered.