• Entry
  • Reader's guide
  • Entries A-Z
  • Subject index

Sunk Costs

The sunk-cost or escalation effect leads a decision maker to continue a course of action into which an initial investment of time, thought, or expense has been “sunk,” even after that particular course of action has proven to be a suboptimal choice. Like most cognitive heuristics, maintaining an unsuccessful course of action is often adaptive, as positive outcomes can take time to accrue, and there are always costs involved in switching. However, it can be counterproductive when the decision is based solely (or primarily) on the mere fact of having made a large prior investment instead of on an objective appraisal of current and future prospects.

Sunk Costs in Medical Decisions

Every day, medical practitioners are faced with making decisions where no clearly right or wrong answers ...

    • Loading...
    locked icon

    Sign in to access this content

    Get a 30 day FREE TRIAL

    • Watch videos from a variety of sources bringing classroom topics to life
    • Read modern, diverse business cases
    • Explore hundreds of books and reference titles