Continuing investment based on past costs rather than future value.
Arkes and Blumer's 1985 theatre-season study is the empirical case. The label Concorde fallacy invokes that project as a symbol of escalation after large prior investment, though archival histories show its continuation also reflected electoral politics, industrial policy, Anglo-French commitments, cancellation costs and strategic concerns.
In practice
- Also called the Concorde fallacy, though that project's continuation had several causes besides what had already been spent.
- A household that 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