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Godin explains why sunk costs — money, time, or effort already spent — should be irrelevant to future decisions but dominate our thinking. The inability to ignore sunk costs keeps people in bad jobs, bad relationships, and bad investments.
Highlights
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The sunk cost fallacy keeps people trapped in situations they would never choose to enter today
Godin: ask yourself — if I had not already invested X years/dollars/effort, would I choose this path today? If the answer is no, the sunk cost is keeping you trapped, not informing your decision.•
Organizations are even worse at ignoring sunk costs than individuals — because admitting the sunk cost means someone gets blamed
Godin: individuals struggle with sunk costs, but organizations are worse because canceling a project means admitting someone made a mistake. Career incentives prevent people from killing bad projects.