sunk cost
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Sunk Cost: Knowing When to Call It Quits Acknowledging that a product isn't ready to ship may seem like a simple call—if it isn't the desired quality by the target date, why not pull the plug? But when you start considering all the effort, time, and money you've already invested, it becomes harder to make that decision. Here's a story to help you remember. |
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Why Losses Affect Us More Than Gains and What That Means at Work Loss aversion is the cognitive phenomenon that a loss of a dollar will make you more miserable than a gain of a dollar will make you happy. This causes people to make irrational decisions to ride out potential losses, whether it's sitting through a bad movie or continuing work on a failing project. |
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Cancel or Save a Troubled Project: How to Decide If your project is going nowhere—or if it’s going somewhere, but it's rapidly downhill—sometimes there’s no choice but to scrap it. Of course, that’s easier said than done because the issue of sunk costs often kicks in. How do you assess whether the benefits will still outweigh the investment? |
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Quitters Sometimes Do Win: How to Recognize and Confront Sunk Costs From Freakonomics coauthor Stephen Dubner: "A ‘sunk cost’ is just what it sounds like: time or money you've already spent. The sunk-cost fallacy is when you tell yourself that you can't quit because of all that time or money you spent. We shouldn't fall for this fallacy, but we do it all the time." |
