Abstract

This chapter focuses on one of the common fallacies in Western philosophy called 'sunk cost'. In economics, a sunk cost is an investment that can never be recovered. Prime examples include money spent on research and development or advertising for a product. However, there is a way to think of cost in terms of time, energy, and even emotion. The way to avoid this fallacy is to not allow the fear of losing what was already invested in something to influence one's rational, objective decision about a present or future investment. In Eric Nielsen's words, when making any decision, economic or otherwise, it “makes no sense to factor in sunk costs precisely because they are sunk; no present action can change them. No matter what happens, the sunk costs are always there”.