Sunk Cost Fallacy: How Past Investments Trap Us in Bad Choices

Most of us have persisted with a painful activity just because we spent too much to quit: the costly gym membership, the uncomfortable shoes, the half-eaten entrée, or even disagreements about childhood wardrobes. We think, 'I’ve put so much in—I can’t give up now.' This is the sunk cost fallacy—the mistake of letting bygone investments dictate present and future choices.

In economic theory, only future gains and costs should matter. But emotion makes us humans: we hate admitting loss, and so we keep digging. Research reveals that both adults and children resist abandoning 'wasted' effort, and organizations or even governments escalate commitment in doomed ventures because they can’t stomach ‘walking away’.

The trick is to turn your attention from what’s lost to what you stand to gain—or lose—moving forward. That doesn’t come naturally, but it’s a learnable, freeing skill that enables swifter pivots and better well-being.

Over the next week, catch yourself clinging to a task, purchase, or hobby for old times’ sake, then deliberately imagine you’re starting from zero. Would you still say yes to this today? Challenge yourself with a reminder that what’s gone is gone. If you need to, explain your thinking to someone who can cheer your fresh start. You’ll find it easier to move on to the next opportunity—minus the weight of wasted effort.