Sunk Cost Fallacy
- “why can't I quit something I've invested in”
- “I've come too far to stop now”
- “sunk cost fallacy relationship”
- “staying because of what I've already spent”
:: COMPARE ::
Sunk cost fallacyvsLoss aversion
The short answer
Loss aversion is why quitting hurts — you feel the write-off as a loss. The sunk cost fallacy is what you then do about it: keep spending to postpone booking that loss. One is the engine, the other is the behaviour it drives.
Side by side
| Aspect | Sunk cost fallacy | Loss aversion |
|---|---|---|
| Is | A behaviour | A feeling |
| Looks | Backward | At the reference point |
| Produces | Continued spending | Reluctance to realise |
| Named | 1985 | 1979 |
Which one you meant
Readers who land here meaning Sunk Cost Fallacy rather than Loss aversion are usually searching for phrases like “why can't I quit something I've invested in”, “I've come too far to stop now”, “sunk cost fallacy relationship”.
Loss Aversion
- “why does losing hurt more than winning feels good”
- “why can't I sell a losing stock”
- “loss aversion explained”
- “protecting a streak I don't care about”
Which came first
Loss aversion. 1979 — Prospect theory gives the value function a kink at the reference point — steeper for losses than for gains. Published in Econometrica by Kahneman and Tversky.
- 1979Loss AversionProspect theory gives the value function a kink at the reference point — steeper for losses than for gains. Published in Econometrica by Kahneman and Tversky.
- 1985Sunk Cost FallacyHal Arkes and Catherine Blumer publish 'The Psychology of Sunk Cost'. Buyers of a university theatre season ticket were randomly given the full $15 price, $13, or $8. Over the first half of the season, full-price buyers attended significantly more plays — identical tickets, identical shows, different amounts already spent.
Read either one in full