Also known as the Concorde Effect, sunk cost fallacy, or our boys shall not have died in vain fallacy. In economics, any past investment which cannot be altered by present or future actions is considered to be sunk cost. The Concorde fallacy is the act of allowing sunk cost to affect future investment decisions. (A fallacy is a reason that sounds good, but in actuality is false reasoning)
Examples:
You have good tickets to a basketball game an hour drive away. There’s a blizzard raging outside, and the game is being televised. You can sit warm and safe at home by a roaring fire and watch it on TV, or you can bundle up, dig out your car, and go to the game. What do you do?
You’ve ordered too much food at the restaurant and there you are, completely stuffed, with a pile of pasta sitting on your plate. Do you clean your plate or not?
When one makes a hopeless investment, one sometimes reasons: I can’t stop now, otherwise what I’ve invested so far will be lost. This is true, of course, but irrelevant to whether one should continue to invest in the project. Everything one has invested is lost regardless. If there is no hope for success in the future from the investment, then the fact that one has already lost a bundle should lead one to the conclusion that the rational thing to do is to withdraw from the project.
The Concorde fallacy is so-called because the British and French governments continued to fund the Supersonic Concorde project (started in 1963) long after it was determined that it would likely never yield a profit. It was very nearly cancelled, but strong political pressure (to avoid wasting public resources) and myriad legal troubles prevented both France and Britain from pulling the plug. Eventually, the fleet was retired after 2003 due to a crash, post-9/11 economic effects and a few other reasons.
These concepts are not limited to the field of economics, of course. It is very easy to see how the ideas of sunk cost and the Concorde fallacy can relate to warfare, evolutionary theory, sociology, and interpersonal relationships.
It has gotten the United States into trouble once before. As casualties mounted in Vietnam in the 1960s, it became more and more difficult to withdraw, because war supporters insisted that withdrawal would cheapen the lives of those who had already sacrificed. We “owed” it to the dead and wounded to “stay the course.” We could not let them “die in vain.” What staying the course produced was perhaps 250,000 more dead and wounded.
Sources:
www.slate.com/id/2125910/
everything2.com/index.pl?node_id=1769635
skepdic.com/sunkcost.html
en.wikipedia.org/wiki/Concorde
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