The Sunk Cost Fallacy Sinkhole

And how not to fall in this campaign season.

As campaign season is upon us, let’s talk about a classic cognitive bias trap that we’ve all fallen into at some point: The Sunk Cost Fallacy.

The Sunk Cost Trap

Picture this: you’ve invested a not-insignificant amount of time, money, or effort into something, be it a project, a relationship, or even a sinking ship (metaphorically, of course), and when things start going south, you find yourself clinging on for dear life just because you’ve already put so much into it.

You wouldn’t want all that hard work, money, and effort to be wasted, right? Wrong.

That’s the Sunk Cost Fallacy.

It’s like that feeling when you’ve already waited in line for an hour for a mediocre movie, and even though you realize it’s a dud 15 minutes into the movie, you stick around because, well, you’ve invested all that time, right?

That’s where the fallacy lies. Instead of cutting your losses and walking away, you’re throwing good time after bad.

Smart people, successful companies, and prudent governing bodies fall into this trap all the time — everyone is guilty of it. But recognizing this sneaky little cognitive bias can be a game-changer. It’s about focusing on the future rather than dwelling on the past.

If you find yourself on a sinking ship of your own making, remember: sometimes, it’s better to abandon ship and swim for shore rather than go down with it just because you’ve already bought a ticket.

Incidentally, the sooner you abandon a sinking ship — metaphorically or otherwise — the better.

Imagine a group of people sailing on a ship. Imagine that the ship is struck and begins to sink. The people who acclimate to the new reality fastest have the best chance at survival

Sunk-cost trapped passengers who ignore the danger, refuse to abandon the ship that has gotten them safely this far, and continue to pretend nothing is amiss aren’t likely to live to tell the tale.

Learning to recognize and avoid the Sunk Cost Trap is easier if one understands another, closely related, logical fallacy: The Gambler’s Fallacy.

The Gambler’s Folly

Picture this: you’re at the casino, staring at that roulette wheel, convinced that red is “due” because black has come up five times in a row.

How very wrong you are.

In layman’s terms, this tricky little fallacy fools your brain into thinking that past outcomes somehow influence future probabilities. So, if you’ve been on a losing streak, you start believing that a win is just around the corner.

But here’s the kicker: each spin of the wheel is like flipping a coin — it’s totally independent of previous spins.

So, whether that little ball lands on red or black doesn’t give a hoot about what happened before. It’s all about the luck of the draw.

So how does the wise voter avoid Sunk Cost Traps and Gambler’s Folly?

Recognize sunk costs: Understand that what’s already been invested (time, money, effort) is already gone and cannot be recovered. Separate past investments from future decisions.

Focus on future outcomes: Base your decisions on what will maximize future benefits rather than trying to justify past investments. Ask yourself: “Is this the best choice moving forward?”

Have an exit strategy: Set limits. Establish criteria for when to cut your losses. Determine in advance what conditions would warrant abandoning a project or endeavor.

Ask for help: Consult with others who can offer unbiased opinions. Sometimes, an outside viewpoint can provide clarity and help you see beyond sunk costs.

Learn from experience: Reflect on past instances where the Sunk Cost Fallacy may have influenced your decisions. Use these lessons to improve your decision-making process in the future.

With a little practice, recognizing cognitive bias can help decision-making in all aspects of life, including politics.

(contributing writer, Brooke Bell)