Commitment to prior investments escalates and makes it harder to abandon prior investments even if it may not make rational sense is called __________ .
A) cost abandonment fallacy
B) sunk cost fallacy
C) commitment cost fallacy
D) committed cost fallacy

Question

Quizplus · Accepted Answer

The sunk cost fallacy refers to the phenomenon where people continue investing in a project or decision based on the amount already invested (time, money, resources) rather than the current and future value or potential. This fallacy leads individuals to continue with an endeavor that may no longer be rational or beneficial, simply because they have already committed resources to it.

Commitment to Prior Investments Escalates and Makes It Harder to Abandon