Why would intelligent, capable British and French government officials continue to invest in what was clearly a losing proposition for so long? One reason is a very common psychological phenomenon called "sunk-cost bias." Sunk-cost bias is the tendency to continue to invest time, money, or energy into something we know is a losing proposition simply because we have already incurred, or sunk, a cost that cannot be recouped. But of course this can easily become a vicious cycle: the more we invest, the more determined we become to see it through and see our investment pay off. The more we invest in something, the harder it is to let go. The sunk costs for developing and building the Concorde were around $1 billion. Yet the more money the British and French governments poured into it, the harder it was to walk away.3 Individuals are equally vulnerable to sunk-cost bias. It explains why we'll continue to sit through a terrible movie because we've already paid the price of a ticket. It explains why we continue to pour money into a home renovation that never seems to near completion. It explains why we'll continue to wait for a bus or a subway train that never comes instead of hailing a cab, and it explains why we invest in toxic relationships even when our efforts only make things worse. Examples
( Greg McKeown )
[ Essentialism: The Disciplined ]
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