International Law

What is the Sunk Cost Fallacy?

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"Sunk costs should be ignored...but that's hard to do.

Last year I bought a DVD set of a TV series I never got to watch. I watched the first episode. Didn't get into it that much. Put it on the shelf. Each time I see it, I think, gee, I should really watch that.

But I don't. Give it away? !! I spent $113 on it!

I realized my silliness today - I'll give it away.

Sunk costs. We have them all over our lives. Emotion, time, effort and money. We hang onto people, ideas and things because we've got sunk costs.

But is that a good reason to hang on to something?

If you've spent $3,500 on product and training programs that aren't working for you, you have sunk costs. So you keep thinking you should be doing them.

But you don't. And you feel guilty."

If you have spent $3,500 on product and training programs, then you have probably bought a franchise.

No need to worry about feeling guilty - just sue, for a violation of your local state's business opportunity statute.

Full post as published by Misleading Advertising Law on July 01, 2008 (boomark / email).