Here is a fallacy that could cost you a lot of money. When an investor sticks with a poor investment because of all the money they have already put in, or someone stays in a bad relationship because of their “history” they are committing the sunk cost fallacy.
This is essentially where we persist with a course of action long before it has become pointless or even counter-productive, simply because we have already invested a lot of our time, energy, or money into it.
This is very tempting, because we think that if the action pays off, it will retroactively justify all the poor choices we have made up until that point.
But it won’t, so maybe back out of that pyramid scheme you are knee-deep in.
#study #cambridgeuniversity #student #logic #investment
