You’ve paid ₹500 for a movie ticket. Forty minutes in, it’s clear the film is terrible. Do you stay?
Most of us stay. I’ve already paid for it.
But think about it for a second. The ₹500 is gone whether you stay or walk out. The only real question is: how do you want to spend the next ninety minutes? Watching a bad film, or doing almost anything else?
Staying doesn’t get your money back. It just adds your time to the loss.
The fallacy
A sunk cost is something you’ve already spent and can’t recover: money, time, effort. The sunk cost fallacy is letting it decide what you do next.
It feels wrong to “waste” what you’ve put in, so we keep going, hoping to justify the past. But nothing you do now can change the past. Only the future is still up for grabs.
Not just movie tickets
In 1985, psychologists Hal Arkes and Catherine Blumer asked people to imagine they’d accidentally booked two ski trips for the same weekend: a $100 trip to Michigan and a $50 trip to Wisconsin. They were told Wisconsin would be more fun. Neither ticket could be refunded.
More than half chose Michigan, the trip they’d enjoy less, because it cost more.
It happens at a much bigger scale too. Britain and France kept funding the Concorde long after it was clear it would never make money, partly because so much had already been spent. That’s why you’ll sometimes hear this called the Concorde fallacy.
You’ll see it in:
- Startups that keep building a feature nobody wants because “we’ve already put six months into it”.
- People staying in a course, job or plan mostly because of the years already given.
- Holding a falling stock “until it gets back to what I paid”.
The one-question fix
When you’re stuck, ask:
If I were starting fresh today, knowing what I know now, would I choose this?
If the answer is yes, carry on, and do it with a clear head. If it’s no, the time and money you’ve spent aren’t a reason to continue. They’re the price of the lesson.
A fair warning
Not every “keep going” is a fallacy. Sometimes past effort really does make the future cheaper: you’ve learnt the skill, built the base, and the finish line is close. The test isn’t did I invest a lot? It’s is what’s ahead worth what it will cost from here?
Count only what’s still ahead. The rest has already been paid for.
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