Sunk Cost Fallacy

In economics and business decision-making, a sunk cost, also called a retrospective cost, is a cost that has already been incurred and cannot be recovered, distinct from a prospective cost, a future cost that can still be avoided by present action. Economists argue that a sunk cost is no longer relevant to rational decision-making about the future, since the money is already spent and carries no bearing on what happens next, yet people in everyday life often let previous expenditures, such as money already spent repairing a car or a house, continue to shape their future decisions about those same properties anyway. This psychological tendency to let an unrecoverable past cost keep pulling further investment and effort toward it, rather than weighing only the costs and benefits still to come, is the sunk cost fallacy.