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The Impact of Sunk Cost Bias on Decision-making in Leadership
The chapter discusses the concept of sunk cost bias in decision-making, particularly focusing on how leaders tend to stick to failing courses of action due to concerns about reputation. It explores various experiments designed to test this bias and sheds light on the complex relationship between decision makers and observers. Strategies for making better decisions, such as pre-committing to a course of action and incentivizing honest feedback, are also addressed.