The Sunk Cost Fallacy: Why We Hold onto Things We Should Let Go Of

Why does Jimmy throw away the bad fish?

• He doesn't like the taste of bad fish.

• He knows customers won't return if he sells spoiled goods.

• He wants to save time.

• He wants to reduce his workload.

What is the sunk cost fallacy?

• The belief that past investments should not influence current decisions.

• The tendency to continue an endeavor once an investment in money, effort, or time has been made.

• The idea that all costs are recoverable.

• The practice of selling goods at a loss to attract customers.

What was the outcome of the theater ticket experiment?

• There was no difference in attendance between groups.

• People who received discounts attended more plays.

• Children under six attended the most plays.

• People who paid full price attended more plays.

Which of the following is NOT a psychological reason for the sunk cost fallacy?

• Ensuring commitment to activities

• Desire to appear wasteful

• Loss aversion

• Fear of missing out

What question does the video prompt viewers to consider about their own lives?

• What new investments should you make?

• How can you recover past losses?

• How can you increase your savings?

• What would you do differently if you ignored past investments?