Sunk Cost

A sunk cost is a cost that has already been incurred and cannot be recovered, so standard economic theory holds that a rational decision maker should ignore it entirely when choosing what to do next and weigh only future costs and benefits. The sunk cost fallacy is the well documented tendency of people and organizations to keep funding a failing project because of what has already been spent on it, letting an unrecoverable past expense influence a forward looking decision it has no bearing on. The pattern is one of behavioral economics' most replicated findings and a standard explanation for why individuals and firms alike persist in losing ventures.