What is the ‘sunk cost fallacy’?

Is it ever a good thing?

By Aaron Nicholas

Have you ever encountered a subpar hotel breakfast while on holiday? You don’t really like the food choices on offer, but since you already paid for the meal as part of your booking, you force yourself to eat something anyway rather than go down the road to a cafe.

Economists and social scientists argue that such behaviour can happen due to the “sunk cost fallacy” – an inability to ignore costs that have already been spent and can’t be recovered.