The Sunk-Cost Fallacy

In recent speeches, President Bush has offered a new justification for staying the course in Iraq: the nearly 2,000 American soldiers who have been killed in the conflict. “We owe them something,” the president said on Aug. 22. “We will finish the task that they gave their lives for.”

But as Barry Schwartz at Slate points out, this is a classic example of the Sunk-Cost Fallacy. That’s the tendency of people to continue in a bad course of action because they have already spent so much on the effort.

The world is an uncertain place, and good decisions do not guarantee good results […] But a reason people are seduced by the sunk-cost fallacy is that investments of time, money, or lives on ventures that do not work out feel like failures. They feel like a waste. And people seem willing to waste even more (time, money, or lives) to justify what has already been spent and avoid that sick feeling of failure.

You see this kind of behavior in everything from health club memberships to committed relationships. Do I have to go to the club to justify the money I spent? Should I stay with this person because of all the time we’ve put in to the relationship? Or if I quit now, does that mean I’m a failure?

Nonsense, says Schwartz. It doesn’t make sense for the mundane decisions of our daily lives, and certainly not for the important issues.

How do we honor the sacrifices of those who have died or suffered serious injury in an American conflict? The best way to show how much we respect and value their lives is by refraining from sacrificing other lives in their name