The tendency to continue investing in a losing proposition because of the resources already committed is a cognitive bias influencing decision-making. This bias, well-documented in psychology, leads individuals to irrationally persist with endeavors where future outcomes are likely negative, driven by a desire to justify prior investments of time, money, or effort. For instance, an individual might continue attending a course they find unhelpful simply because they have already paid the tuition fee, even if withdrawing and pursuing more beneficial activities would be a wiser course of action.
Understanding this bias is crucial for making sound judgments across various domains. Recognizing its influence allows for more objective assessment of situations and reduces the likelihood of escalating commitment to failing projects. Historically, this concept has been utilized in analyzing investment decisions, project management failures, and even personal relationships, highlighting its pervasive impact on human behavior and its role in poor decision outcomes.