The Sunk Cost Fallacy and Decision Making

The sunk cost fallacy is illustrated by scenarios such as choosing between a $100 and a $50 ski ticket or investing a last million in a plane research project. Research shows that people often cling to choices based on past investments rather than future benefits due to loss aversion, leading to irrational decision-making. This fallacy applies to various areas of life, from career decisions to financial investments, emphasizing the importance of focusing on future outcomes rather than past investments.