Sunk Cost Fallacy

Imagine you buy a ticket to a concert for two hundred dollars. On the night of the show, you feel terrible. You have a headache, it is raining, and you would rather stay home. But you go anyway because you already spent the money. The two hundred dollars is gone whether you attend or not. Going to the concert does not get the money back. Staying home and resting is objectively the better decision. But your brain refuses to accept that the money is gone, so it drags you out the door into the rain to justify a cost that has already been paid. Now scale this up. A company has spent three hundred million dollars developing a product that internal testing shows customers do not want. The rational move is to kill the project and redirect the resources to something with actual demand. But the executives cannot stomach writing off three hundred million. So they spend another hundred million trying to fix it, then another fifty million on marketing, and then the product launches to devastating failure.