Pablo and his managers spent a large sum of money on the new training program, and they feel that there has been little improvement as a result of the investment. The training is scheduled to continue for two more months, and Pablo feels that the company has already spent too much money on the training to simply abandon it. Pablo is experiencing
A) blind bias.
B) a training trap.
C) confirmation bias.
D) sunk-cost bias.
E) a catch-22 effect.

Question

Quizplus · Accepted Answer

The sunk-cost bias, or sunk-cost fallacy, is when managers add up all the money already spent on a project and conclude it is too costly to simply abandon it. Most people have an aversion to "wasting" money. Especially if large sums have already been spent, they may continue to push on with an iffy-looking project to justify the money already sunk into it.

Pablo and His Managers Spent a Large Sum of Money