We encourage people not to quit even though it's like a series of textbook examples of what economic theory tells us not to do: basically, the sunk cost fallacy, which drives people to continue a course of action in order to justify the volume of their previous efforts, despite the fact that a clear-eyed cost-benefit analysis would tell them that continuing is unlikely to be worth the effort.
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The sunk cost fallacy keeps us invested in losing propositions:
Humans are especially susceptible to the “sunk cost fallacy”—a psychological effect where we feel compelled to continue doing something just because we’ve already put time and effort into it.
But the reality is that no matter what you spend your time doing, you can never get that time ba...
When running a company, many entrepreneurs fail to quit, change direction or pivot their business model, unable to admit that what they were doing isn’t working, or that they were plain wrong in their decisions.
The Sunk Cost Fallacy is the primary reason for this gross error in ju...
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