Sunk Cost Fallacy: Why We Stick With Bad Decisions

We’ve all stuck with something longer than we should have — a dead-end relationship, a job that doesn’t align with goals or even a TV series that’s just not cutting it.

Why? Because we’ve already invested time, money or effort into them. That’s called the “sunk cost fallacy,” and it can cloud your judgment more than you may realize.

What is the sunk cost fallacy?

The sunk cost fallacy is a kind of cognitive bias that happens when you stick with a decision not because it’s the best choice, but because of all you’ve already put into it. It’s rooted in economic theory, but it’s easy to see how it applies to human behavior, too.

“People often feel guilty walking away from something they’ve already spent time or money on — even if it’s no longer serving them,” says psychologist Susan Albers, PsyD. “It feels like quitting or wasting effort, even if letting go is actually the healthier move.”

If it’s hurting us, holding us back or adding frustration to our lives, why can’t we seem to just cut ties and move on?

“We tend to overemphasize the resources we’ve already invested in something,” Dr. Albers explains. “We allow the perception of that ‘sunk cost’ to guide our future decisions.”

Think of it like this: It can be relatively easy to call off an unfulfilling relationship that’s only been going on for a few weeks. It’s much harder to leave a mediocre (or worse) relationship after 10 years. That’s, at least in part, because you’ve already invested so much time and emotional work in that relationship for all those years.

But the irony is, sticking around can continue to drain your time, happiness and energy on a relationship that may not be worth it at all. And the longer you stay, the more you’ll keep sinking into that relationship.

“Just like money, our time, energy and headspace are all valuable and limited resources — and we should try to protect them,” Dr. Albers stresses. “Otherwise, we can end up losing even more in our efforts to avoid ‘wasting’ these precious commodities.”

Examples of the sunk cost fallacy

You’ve probably encountered the sunk cost fallacy in your own life. Here are some common examples:

• Finishing a boring movie or book just because you already made it halfway through
• Continuing a job that’s draining you because you’ve built your career there
• Eating after you’re full because you already paid for it
• Sticking with a project that no longer interests you because you’ve bought the materials
• Holding onto unused subscriptions because you already paid for the year
• Wearing uncomfortable shoes because they were expensive
• Continuing therapy with a provider who isn’t a good fit because you’ve already had several sessions

There is a silver lining, though. There are times when the fallacy can help you push through short-term discomfort for long-term gain.

If you’re just a few credits short of finishing a degree and are considering quitting, it can help you finish your program. Or if you’re painting your house and it’s getting tedious, the sunk cost fallacy can keep you from stopping halfway through.

How to overcome the sunk cost fallacy

Being aware of the sunk cost fallacy is the first step toward keeping you out of a cycle that isn’t serving you. Dr. Albers offers these strategies:

• Pause and reflect. Ask yourself, If I hadn’t already invested in this, would I still choose it today?
• Separate emotion from logic. Guilt and obligation aren’t good enough reasons to stay in a bad situation.
• Focus on the future. Instead of dwelling on what you’ve already spent, think about what you could gain by moving on.
• Talk it through. A friend or therapist can offer a fresh, outside perspective.
• Give yourself permission to pivot. “Changing course isn’t failure,” Dr. Albers advocates. “It’s self-awareness and strength.”
• Counsel yourself like you would a friend. Consider what you’d advise someone else to do in a similar situation. What would you tell someone else in your shoes?

Letting your investments from the past dictate your current decisions can keep you stuck in relationships, careers or commitments that no longer align with your goals.

“We can’t recoup the time, money or emotional resources we’ve already sunk into unfixable situations, but we can certainly improve the future by cutting our losses when it’s time,” Dr. Albers says.