Sunk cost
Also called Let it go, Folding, Escalation of commitment.
What you have already spent is gone. Decide on what happens next, not on what you put in.
In poker, folding a hand you have put points into is often right. Your earlier points are no longer yours: they are part of the pot. They make the price of calling look better, which is why pot odds count them, but they are not a reason in themselves to keep going.
In chess, giving up a plan you have spent moves on, once it stops working, is a strength. In organisations the same trap is called escalation of commitment: the more a team has put into a plan, the harder it is to stop.
Why it matters
Throwing good after bad is one of the most common and costly mistakes people make.
Away from the game
A failing project, a bad investment or a long queue: the time already spent is not a reason to spend more.
Try it yourself
In a game of chess, you spent five moves bringing a knight into an attack. The attack has failed and the knight is now in danger. What should decide your next move?
2 questions, a minute or two. Nothing to finish first.
Want more? Practise Size the risk.
Play it out: the Gain or loss? lab, about five minutes against bots.
Learn and practise it
- Skill: Size the risk