Joe pre-orders a non-refundable movie ticket. He then reads a number of reviews of the movie in question that make him realise that he will not enjoy it. He goes to see it anyway, rationalising that otherwise his money will have been wasted. Is Joe succumbing to the Sunk Cost Fallacy?
A)No, because going to see the movie means that the product of his initial investment was realised as originally planned.
B)Yes, since he invested a valuable asset, his time, in a project based on its previous costs.
C)No, because the cost of the movie was not recoverable and would have been lost whatever action he took.
D)No, because he incurred no further costs by going to see the movie.

Question

Quizplus · Accepted Answer

Joe is succumbing to the Sunk Cost Fallacy because he is making a decision based on the fact that he has already invested in the ticket and cannot get his money back, rather than making a decision based on whether or not he actually wants to see the movie. He is valuing his initial investment over his own preferences and time, which is a common mistake known as the Sunk Cost Fallacy.

Joe Pre-Orders a Non-Refundable Movie Ticket