Sunk cost

The sunk cost effect is the tendency to keep investing in something because of what has already been spent, even when the past cost cannot be recovered and should not affect the next decision. Hal Arkes and Catherine Blumer showed it in 1985 with theatre season tickets, and Richard Thaler had described the idea in 1980. It shows up in projects, subscriptions, relationships and investments. Recognising it does not mean quitting everything; it means asking whether you would start this today. This page collects our articles, quizzes and videos on sunk costs and how to decide what to do next.