Why we irrationally cling to failing investments

The sunk cost fallacy describes our tendency to keep investing in something because of past efforts, even when it's clearly failing. This irrational persistence happens because we feel compelled to justify previous spending of time, money, or energy, rather than focusing on future benefits. Coined in the late 1970s by economists Richard Thaler and Daniel Kahneman, this bias shows how emotions often override logic. For example, you might stay in a bad movie after buying a ticket, or a company might pour more funds into a failing product. Studies in the 1980s found that up to 85% of people exhibit this bias, highlighting its widespread impact. Even animals show a similar 'Concorde effect,' suggesting deep evolutionary roots.