The human tendency to judge options according to the size of previous investments rather than the size of the expected return is called:
A) economic loss.
B) the sunk-cost fallacy.
C) groupthink.
D) a framing error.

Question

Quizplus · Accepted Answer

The sunk-cost fallacy is a cognitive bias where individuals continue to invest in a project or option based on the amount of resources already dedicated to it, rather than the potential future benefits. This can result in poor decision making and is a common pitfall in business and personal decision making.

The Human Tendency to Judge Options According to the Size