Decision-makers increase investment in a failing course to justify their earlier choice.
Staw's 1976 studies. The mechanism is self-justification rather than sunk cost arithmetic: the effect is strongest when the same person made the original decision and must now be seen to have been right.
In practice
- A programme director who chose the vendor authorises a further £2m rather than concede the selection was wrong.
- A homeowner who has spent £30,000 on a renovation approves the next £10,000 because of the £30,000, which is gone either way.
- Further reading
- Wikipedia
- Subject
- Decision-making & Reasoning
- Essay
- The catalogue of predictable errors