Is Sunk Cost Fallacy a Fallacy?

by gwern 8y4th Feb 201281 comments

19


I just finished the first draft of my essay, "Are Sunk Costs Fallacies?"; there is still material I need to go through, but the bulk of the material is now there. The formatting is too gnarly to post here, so I ask everyone's forgiveness in clicking through.

To summarize:

  1. sunk costs are probably issues in big organizations
    • but maybe not ones that can be helped
  2. sunk costs are not issues in animals
  3. they appear to be in children & adults
    • but many apparent problems can be explained as part of a learning strategy
  4. there are few clear indications sunk costs are genuine problems
  5. much of what we call 'sunk cost' looks like simple carelessness & thoughtlessness

(If any of that seems unlikely or absurd to you, click through. I've worked very hard to provide multiple citations where possible, and fulltext for practically everything.)

I started this a while ago; but Luke/SIAI paid for much of the work, and that motivation plus academic library access made this essay more comprehensive than it would have been and finished months in advance.