Separate the sunk cost from the next decision

What you already spent is gone — decide only on what happens next.

Why it works

Loss aversion fuels the sunk-cost fallacy: continuing a losing path to avoid "wasting" what was already spent, because abandoning it crystallizes the loss. The money, time, or effort is unrecoverable either way, so it should carry zero weight in the forward-looking choice. Naming the sunk cost explicitly lets you exclude it from the calculation.

How to do it

1. State out loud what is already spent and unrecoverable — then label it "gone, irrelevant."
2. Ask only: from where I stand right now, what is the best next move?
3. If you would not start this path fresh today, that is your answer.

Evidence

The sunk-cost effect is well documented experimentally; Arkes & Blumer showed people persist with a worse option simply because they already paid for it, across multiple studies. (rct)

Some persistence is rational (reputation, learning, contractual obligation); the fallacy is letting the unrecoverable cost itself drive the choice.

Sources

• Arkes & Blumer (1985), "The Psychology of Sunk Cost", Organizational Behavior and Human Decision Processes

Common mistake

Doubling down to "make it worth it." The more you have lost, the stronger the pull to keep going — which is exactly when to stop and recompute from zero.