Have you ever felt stuck in a relationship that went sour or trapped in a job that no longer rewards you but you just can’t seem to quit?
Meet the sunk cost effect. This is the same reason we have trouble getting rid of clothes we no longer wear or moving out of places we used to love that now drive us crazy.
A new paper published in the journal Psychological Science explores our tendency to stay all in on a botched plan even when it flies in the face of rational decision making.
Why do we insist on throwing good money (or time) after bad?
“The sunk cost effect is the general tendency for people to continue an endeavour, or continue consuming or pursuing an option, if they’ve invested time or money or some resource in it,” Christopher Olivola, an assistant professor of marketing at Carnegie Mellon’s Tepper