← Cognitive Bias Cards
Cognitive Bias Cards · Card 7
Sunk Cost Fallacy
Money already spent is gone.Decide from today forward.
- Looking back
- Looking forward
- 'I've already put in ₹50,000'
- Would I hold it from today?
Money or effort already spent is gone either way; the only real question is what to do from here, not what you've already put in.
Money Already Gone
Spent; can't be undone
Irrelevant to what to do next.
The Real Question
What's the right call from today?
In Practice
Holding a losing stock because "I've already put ₹50,000 into it" ignores that the ₹50,000 is gone regardless; the only real question is whether to hold it from today forward.
Generic Example
Finishing a bad movie "because I already paid for the ticket" doesn't get the money back; it just adds two wasted hours to the wasted money.
Ask yourself
If I were deciding this fresh today, with no history, what would I actually choose?