Definition. The tendency to keep going with something just because time, money or effort has already been invested in it, even though the future benefits don't justify it.
How it works
Arkes and Blumer (1985), among others, described the phenomenon. Costs already incurred are irreversible, but emotionally they're hard to “let go”.
Example
A trader sticks with a method that hasn't worked for a long time because they've spent hundreds of hours on it, or stays in a position “because I've already lost so much on it”.
What to watch out for
It's worth judging decisions from today's perspective: would I make this decision now if I were starting from scratch?
You'll find the full explanation with graphics, examples and exercises in the 💪 Fitness and routine space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
