Sunk Cost Fallacy & Strategic Trap

The tendency for organizations to continue investing in underperforming ventures because of past, unrecoverable costs—such as bonuses, R&D spending, or capital expenditures—hoping future profits will offset earlier losses. This decision-making error blurs the critical boundary between money already spent and money that should be spent going forward, often trapping the organization deeper in decline.

Read the daily articles behind this idea on the Chinese edition.