Thinking, Problem-Solving, Judgments, and Decision-Making

AP Psychology· difficulty 4/5

The sunk cost fallacy involves

A
$Continuing investment in a poor option because of already-spent resources$
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B
$Making decisions based only on future expected costs without considering past$
C
$Abandoning a project once any small initial loss occurs in early stages$
D
$Refusing to invest in any option until guaranteed positive returns are shown$

Explanation

Past costs are irrelevant to future decisions, but humans struggle with this.

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