Bizactly

As humans, we often fool ourselves. If we are aware of thinking traps, we are less likely to fall into them.
A common thinking trap is the "Sunk Cost Fallacy". We can fall for this in business as well as our personal lives.
⏰ If a person has invested time or effort in a venture, they overestimate its potential to succeed and are reluctant to abandon it.
⚠️ They associate changing or ending the venture with loss or failure.

Sunk Cost Fallacy - Examples
📊 Example - Personal Investments
💵 An investor buys a share for $1000.
📉 The share value drops to $500 but the investor doesn’t want to lose money and holds on to it, hoping that price rises.
❌ The price falls to $100 and he loses more money.

🔄 The sunk cost argument makes people and companies double down on existing efforts, when they should rather change direction.

5 months ago | [YT] | 1