Malik Mentoring: Decision-Making: The Incremental Effect of Sunk Cost Bias

Don’t you hate trying to make a decision sometimes?!! When the stakes are high, we become obsessed with avoiding failure or loss and draw on all of our resources in a desperate attempt to succeed. Have you ever wondered why? Let me introduce you to sunk cost bias. It is why people stay in unhealthy relationships or fail to move on in their careers. According to this theory, people have a tendency to persist on the same path of action, even when new information indicates that the choice is not the most appropriate. Sunk cost bias can be observed in relationships, business, gambling, investing, retirement planning, and many other kinds of activities.

It’s why people may be stuck in a job they don't like or are not being treated fairly in - because they've invested their time and energy building their skills at the company, or because they don't want to miss out on the benefits of staying with the company (e.g., health insurance, 401K). It’s why teams spend so much time arguing over mo...

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