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.)

There are very good reasons why finding that one set of studies shows an unusual result is not taken as proof by either doctors or scientists.

Cochrane meta studies are the gold standard. In general they do get taken as proof.

The main point is that you don't need to have a valid theory to be able to produce empirical results.

Then I'm also don't believe that issues surrounding back pain are very well understood by today's Western medicine.

Cochrane meta studies are the gold standard. In general they do get taken as proof.

As a matter of simple Bayseianism, P(result is correct|result is unusual) depends on the frequency at which conventional wisdom is wrong, compared to the frequency at which other things (errors and statistical anomalies) exist that produce unusual results. The probability that the result of a study (or meta-study) is correct given that it produces an unusual result is not equivalent to the overall probability that studies from that source are correct, so "Cochrane m... (read more)

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Is Sunk Cost Fallacy a Fallacy?

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Is Sunk Cost Fallacy a Fallacy?

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