Facing budget cuts, the Pentagon announced its decision to close a local army base. The congressman from the district in which the base is located argued against closing it, saying that the $1.3 billion dollars spent to build it would be wasted if it was closed. This argument is an example of
A) a framing bias.
B) altruism.
C) a sunk cost fallacy.
D) overconfidence.

Question

Quizplus · Accepted Answer

The argument is an example of a sunk cost fallacy because it focuses on the money already spent (which cannot be recovered) as a reason to keep the base open, rather than considering the future costs and benefits of the decision.

Facing Budget Cuts, the Pentagon Announced Its Decision to Close