Named as a behavioral pattern by Richard Thaler (1980) and shown in experiments by Hal Arkes and Catherine Blumer (The Psychology of Sunk Cost, 1985).
Sets aside everything already spent and asks one question: from today, does continuing return more than the best alternative?
When to reach for it
A project, vendor, hire, or investment kept alive mainly because of how much has already gone into it.
How it runs
- Restate the decision as if starting today with current resources.
- Ask whether those resources would be committed now.
- If not, stop or pivot regardless of past spending.
- If so, continue on the forward case alone.
- Run a premortem to catch reasoning driven by attachment.
Where it sits in SOLVE eX
Go to the source
- Toward a Positive Theory of Consumer Choice, Journal of Economic Behavior and Organization, 1980
- The Psychology of Sunk Cost, Organizational Behavior and Human Decision Processes, 1985