Sunk Cost Fallacy

The tendency to continue investing in something because of previously invested resources (time, money, effort) rather than based on future expected value. The money is already spent—it's gone regardless of what you decide next. Rational decisions should be based only on future costs and benefits, but the emotional weight of past investment creates powerful pressure to 'see it through' even when quitting is optimal.

When to use it

Whenever the primary argument for continuing is 'we've already invested so much.' When evaluating whether to persist or pivot. When emotional attachment to past work is influencing strategic decisions.

How it can help

The single most costly cognitive bias in business. Explains why companies continue failing projects, why people stay in bad jobs and relationships, and why 'we've come this far' is the most dangerous phrase in strategy. Mastering this one bias saves more resources than almost any other mental model.