4/17/2023 0 Comments Appeal to wealth fallacySunk costs are probably issues in big organizations Since Arkes & Blumer 1985’s 3 forceful investigation & denunciation, it has become received wisdom 4 that sunk costs are a bane of humanity.īut to what extent is the “sunk cost fallacy” a real fallacy? (A slogan for avoiding sunk costs: “give up your hopes for a better yesterday!”) The single most famous example, and the reason for it also being called the “ Concorde fallacy”, would be the British and French government investing hundreds of millions of dollars into the development of a supersonic passenger jet despite knowing that it would never succeed commercially 2. It can be seen as an attempt to derive some gain from mistaken past choices. The sunk cost fallacy (“Concorde fallacy”, “escalation bias”, “commitment effect” etc.) could be defined as when an agent ignores that option X has the highest marginal return, and instead chooses option Y because he chose option Y many times before, or simply as “throwing good money after bad”. Khieu Samphan 1, Khmer Rouge head of state (est.
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