We keep investing in something just because we already invested before.
You finish a boring movie just because you've already watched an hour of it. The money, time, or effort already invested in something, which can't be recovered no matter what you decide, ends up weighing on decisions that should be based only on what comes from here on.
A project that has already consumed months of work and budget keeps receiving more resources, even though the evidence says it won't work, because "we've already invested too much to stop now." The cost is already sunk whether the project continues or gets canceled, but it keeps being treated as a reason to continue.
Abandoning something we already invested in feels like admitting that effort was wasted. Continuing, even if it's the worst decision, avoids that sense of an acknowledged loss.
Source: Arkes, H. R. & Blumer, C. (1985). The Psychology of Sunk Cost. Organizational Behavior and Human Decision Processes, 35(1), 124-140.
In product or investment decisions, asking "if I were starting today from scratch, would I choose this path?" helps separate the future decision from the cost already sunk, something no report of past results manages to do on its own.
Related concepts
