Operating Principle

2–4 min read

Sunk Costs Feel Like Reasons to Continue, They Aren’t

Sunk Costs Feel Like Reasons to Continue, They Aren’t

Sunk Costs Feel Like Reasons to Continue, They Aren’t

Money and time already spent are irrelevant to whether continuing is right going forward.

Money and time already spent are irrelevant to whether continuing is right going forward.

Money and time already spent are irrelevant to whether continuing is right going forward.

Escalation of commitment compounds losses when past investment is treated as a reason to continue.

Escalation of commitment compounds losses when past investment is treated as a reason to continue.

Escalation of commitment compounds losses when past investment is treated as a reason to continue.

Escalation of commitment compounds losses when past investment is treated as a reason to continue.

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Operating Question

What initiative is still funded mainly because of past spend?

What initiative is still funded mainly because of past spend?

What initiative is still funded mainly because of past spend?

Why It Matters

Escalation of commitment compounds losses when past investment is treated as a reason to continue.

Supporting Evidence

Hal Arkes and Catherine Blumer; Barry Staw on escalation of commitment.

Research Notes

Treat this as a disciplined decision heuristic and account for relevant context and limits.

Practical Actions

Evaluate future costs and benefits only; ask what you would do fresh; separate the decision from its champion.

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