The Sunk Cost Fallacy shapes History — Market Mad House

The concept of the Sunk Cost Fallacy explains many of history’s greatest catastrophes, including World War I, the British Empire, and Communism.

People “commit the Sunk Cost Fallacy when they continue a behavior or endeavor as a result of previously invested resources,” Behavioral Economics observes. Factors that drive the sunk cost fallacy include fear of loss, tradition, patriotism, ideology, loyalty towards institutions or people, history, and commitments.

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Daniel G. Jennings

Daniel G. Jennings

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Daniel G. Jennings is a writer who lives and works in Colorado. He is a lifelong history buff who is fascinated by stocks, politics, and cryptocurrency.