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The article never clearly states what they consider the fallacy to be. So it's maybe not surprising that they seem to actually not understand it. They say: Q
by radford-neal 8y ago
The article never clearly states what they consider the fallacy to be. So it's maybe not surprising that they seem to actually not understand it. They say:
QUOTE: After you’ve invested £10 million ($13m) in a project, which hasn’t delivered, the case for throwing in a further £5 million is far easier to justify if you only consider returns on £5 million – rather than £15 million. But in reality, of course, you also don’t want to look stupid by abandoning it.
But it is CORRECT to consider only the 5 million additional investment when deciding whether to continue the project. Of course, it's not correct (from the organization's point of view) to consider whether you (the employee) will look stupid if it's abandoned. That would be some sort of fallacy. But what is usually in my experience called the "sunk cost fallacy" is the opposite - insisting that to justify continuing the project, it's necessary for it to pay back the whole 15 million, even though 10 million of that is a sunk cost.
- daveFNbuck 8y agoI think they're saying it's correct to only consider the 5 million, then pointed out that you're also biased in that way for other reasons.