Zero out past investment before evaluating the forward decision

Explicitly set prior investment to zero and evaluate only what each future path offers from here.

Why it works

The sunk cost fallacy works by making past investment emotionally salient at the moment of forward decision. Deliberately zeroing it out in the analysis creates a clean forward-only frame. The prior investment is neither added to nor subtracted from the value of future paths — it simply does not appear in the calculation, because it cannot affect outcomes.

How to do it

1. Before any continuation decision, write the past investment (time, money, effort) in a column labeled "irrelevant."
2. Now list only: what will happen if I continue? What will happen if I stop?
3. Evaluate only those forward outcomes against each other.
4. Make the decision that produces the better forward outcome, regardless of what is in the "irrelevant" column.

Evidence

Arkes and Blumer (1985) demonstrated in controlled experiments that prior investment systematically increases willingness to continue bad courses. Zeroing-out framing is the standard economic and decision-theoretic antidote. (rct)

Knowing about the fallacy reduces but does not eliminate it; the emotional salience of past investment is difficult to fully override even with correct analysis.

Sources

• Arkes & Blumer (1985), the psychology of sunk cost, Organizational Behavior and Human Decision Processes

Common mistake

Writing down the past investment and then trying to "ignore" it mentally — it remains visible and continues to influence judgment. Better to physically move it out of the working analysis frame.