The sunk cost effect: why is it so difficult to walk away from something we have already invested so much in?
Time, money, effort, sometimes years of hope… The more we have invested in a situation, the harder it can become to let go. Even when it no longer feels right for us.
“I can’t stop now, after everything I’ve done.”
This sentence might refer to a professional project, a course of study, a relationship, or simply a subscription we never use. It expresses a familiar difficulty: making decisions based on what we have already committed, rather than on what the future might offer us.
In the psychology of decision-making, this phenomenon has a name: the sunk cost effect.
The resulting sunk cost effect has been studied across various disciplines, including psychology (e.g., Astebro et al., 2007; Strough et al., 2008), sociology (e.g., Janssen et al., 2003), management (e.g., Conlon & Garland, 1993; Keil et al., 2000), marketing (e.g., Soman & Cheema, 2001; Soman & Gourville, 2001), industrial economics (e.g., Manez et al., 2009), and finance (e.g., Guler, 2007).
What are sunk costs?
A sunk cost is a past investment that we can no longer recover, regardless of our current decision: money spent, time elapsed, or effort already made.
The effect occurs when this investment encourages us to continue an activity even though its current prospects no longer sufficiently justify our commitment. The foundational work of Arkes and Blumer (1985) examined this tendency to continue after investing money, time, or effort.
The past then becomes a reason to commit even more resources:
“Since I’ve already put so much into this, I have to keep going.”
Yet continuing does not automatically bring back what we have already spent.
The bus that never comes
Imagine you have been waiting for a bus for twenty minutes. Your destination is a ten-minute walk away, and you do not know when the bus will arrive.
You could start walking. But a thought holds you back:
“If I leave now, I’ll have waited twenty minutes for nothing.”
Those twenty minutes have already passed. The decision concerns the next few minutes: walk, or keep waiting while taking the available information into account.
If an app says the bus will arrive in one minute, waiting may make sense. If there is no indication that it is coming, the time already spent at the stop is not enough to justify waiting longer.
The holiday you have already paid for
You have booked a non-refundable holiday. Since then, your wishes have changed: you are exhausted, the itinerary no longer appeals to you, and going would involve further expenses.
Yet you tell yourself:
“I’ve paid, so I have to go.”
If you cancel, the money spent on the booking will remain lost. But going solely to justify that expense may add further costs: transport, meals, fatigue, or days of annual leave.
Research distinguishes, among other things, between decisions to use something already paid for and decisions to continue investing in a project. The influence of past costs varies depending on the context and the type of decision (Roth, Robbert, & Straus, 2015).
One useful question is: is this holiday still worth what it will require of me from today onwards?
Why is changing direction so difficult?
Walking away can feel wasteful. In their experiments, Arkes and Blumer highlighted the role of the desire not to appear wasteful in the sunk cost effect (1985).
In everyday life, other concerns may become intertwined with this feeling:
- acknowledging that a decision did not produce the hoped-for outcome;
- explaining a change to the people around us;
- letting go of a future we had imagined;
- accepting that some efforts will not be rewarded as expected.
These questions go beyond financial calculations. They can touch on our identity: “Who am I if I give up this project?”
When we have invested hope
In a relationship or a personal project, we may have invested much more than time: trust, compromises, and a vision of our future.
The thought “I’ve already devoted so many years to this” can then carry considerable weight.
But time already spent cannot, on its own, determine what should happen next. When reflecting on a relationship, we also need to consider what is happening today: respect, safety, reciprocity, and realistic possibilities for change.
Changing direction does not erase what we have experienced. An experience can have mattered and still no longer meet our current needs.
Persevering or becoming trapped?
Continuing despite difficulties can be a sound choice. Learning takes time; a project may go through a difficult period while still offering promising prospects.
The distinction lies in the reasons supporting our decision.
Persevering means being able to identify present reasons to continue: a goal that still matters, observable progress, plausible prospects, and an acceptable cost.
The sunk cost effect may come into play when our main argument becomes:
“I’ve already invested too much to stop.”
Some questions to help you regain room to choose
When this thought returns, take a moment to ask yourself:
- If I encountered this situation today, would I choose to commit to it?
- What present reasons make me want to continue?
- What will continuing cost me in time, money, and energy?
- What concrete changes would make this commitment satisfying?
- Could I adjust my commitment, take a break, or set a date to reassess it?
You do not always need to choose immediately between continuing everything and abandoning everything. Setting criteria and a deadline can help you move beyond a decision guided solely by the past.
You cannot change the resources already committed. You can still choose where to invest your next ones.
Are you finding it difficult to make a decision or to let go of a situation you have invested heavily in?
Book an appointment to talk it through and explore the choices available to you.
