Peter said, "It's time to bring our troops home from Afghanistan." Ava responded, "We need to keep our troops in Afghanistan or the deaths of all the soldiers who lost their lives fighting will be wasted." What behavior economics bias was Ava committing?
A) mental accounting
B) nominal loss aversion
C) rational ignorance
D) sunk cost fallacy

Question

Quizplus · Accepted Answer

Ava's argument is an example of the sunk cost fallacy, which occurs when people continue a behavior or endeavor as a result of previously invested resources (time, money, or effort), even if they would not start the endeavor knowing what they know now. Ava suggests continuing the action (keeping troops in Afghanistan) because of the past sacrifices, not because of future benefits or costs.

Peter Said, "It's Time to Bring Our Troops Home from Afghanistan