#sunk cost effect

[braincraft]

NEW VIDEO: Why do you love things more when you build them yourself? It all has to do with the IKEA Effect.

It’s a bias in psychology where people place a higher value on items they build themselves compared to items they didn’t construct. Since I’d recently ordered new furniture, I thought I’d put this IKEA Effect into practice.

[adnanuludag]

Terms

[thistres-blog]

SUNK COST EFFECT / FALLACY.

The sunk cost effect is the tendency for humans to continue investing in something that clearly isn’t working.

Because it is human nature to want to avoid failure, people will often continue spending time, effort or money to try and fix what isn’t working instead of cutting their losses and moving on. This tendency, which is known as the sunk cost effect, can be illustrated by the adage “throwing good money after bad.”

In nature, the sunk cost effect is known as the Concorde effect. 

One of the reasons why people avoid discontinuing relationships that aren't even working.