Sunk Cost Dilemma
The economic approach that sunk costs should not be considered when decisions are being made can lead to a situation where the sum of a number of good decisions can lead to one big disaster. This dilemma situation can be described using a game theory approach for 1-player games.
The sunk cost dilemma with its sequence of good decisions should not be confused with the sunk cost fallacy, where a misconception of sunk costs can lead to bad decisions. Sunk-cost fallacy occurs when people make decisions about a current situation based on what they have previously invested in the situation. For example, spending $100 on a concert and on the day you find that it’s cold and rainy. You feel that if you don’t go you would’ve wasted the money and the time you spent in line to get that ticket and feel obligated to follow through even if you don’t want to.
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Famous quotes containing the words sunk, cost and/or dilemma:
“And they wrapped him up in an old cow’s hide,
And they sunk him in the Lowland sea,
And they sunk him in the Lowlands low.”
—Unknown. The Golden Vanity (l. 43–45)
“The President has paid dear for his White House. It has commonly cost him all his peace, and the best of his manly attributes. To preserve for a short time so conspicuous an appearance before the world, he is content to eat dust before the real masters who stand erect behind the throne.”
—Ralph Waldo Emerson (1803–1882)
“Books of natural history aim commonly to be hasty schedules, or inventories of God’s property, by some clerk. They do not in the least teach the divine view of nature, but the popular view, or rather the popular method of studying nature, and make haste to conduct the persevering pupil only into that dilemma where the professors always dwell.”
—Henry David Thoreau (1817–1862)