Is Sunk Cost Fallacy a Fallacy?

gwern

I just finished the first draft of my essay, "Are Sunk Costs Fallacies?"; there is still material I need to go through, but the bulk of the material is now there. The formatting is too gnarly to post here, so I ask everyone's forgiveness in clicking through.

To summarize:

sunk costs are probably issues in big organizations
- but maybe not ones that can be helped
sunk costs are not issues in animals
they appear to be in children & adults
- but many apparent problems can be explained as part of a learning strategy
there are few clear indications sunk costs are genuine problems
much of what we call 'sunk cost' looks like simple carelessness & thoughtlessness

(If any of that seems unlikely or absurd to you, click through. I've worked very hard to provide multiple citations where possible, and fulltext for practically everything.)

I started this a while ago; but Luke/SIAI paid for much of the work, and that motivation plus academic library access made this essay more comprehensive than it would have been and finished months in advance.

To summarize:

sunk costs are probably issues in big organizations
- but maybe not ones that can be helped
sunk costs are not issues in animals
they appear to be in children & adults
- but many apparent problems can be explained as part of a learning strategy
there are few clear indications sunk costs are genuine problems
much of what we call 'sunk cost' looks like simple carelessness & thoughtlessness

(If any of that seems unlikely or absurd to you, click through. I've worked very hard to provide multiple citations where possible, and fulltext for practically everything.)

Any idea whether Go beginners' tendency to "throw good stones after bad" results from sunk cost fallacy in particular, or from wishful thinking in general?

Like, is the thought "I don't want my stones to have been wasted" or "I really want to have that corner of the board"?

I'd have to look at actual evidence to answer that question with any degree of authority, and that would take more time than I have right now, but I can sketch an answer...

My source of empirical evidence would be the Go Teaching Ladder, where you get a chance to see higher level players commenting on the inferred thought processes of more novice players. (And more rarely, novice players providing direct evidence of their own thought processes.)

Higher level players tend to recommend "light" play, over "heavy" play: a typical expression i... (read more)

1gwern14y

It may be an example of a different bias at play, specifically confirmation bias: they don't realize that the stones are being wasted and can't be retrieved. For example, chess masters commit confirmation bias less than weaker players. (It's not that the players explicitly realize that there are better moves elsewhere but decide to keep playing the suboptimal moves anyway, because of sunk costs which would be sunk cost bias; it's that they don't think of what the opponent might do - which is closer to 'thoughtlessness'.)

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Is Sunk Cost Fallacy a Fallacy?

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Is Sunk Cost Fallacy a Fallacy?

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