gwern comments on Sunk Cost Fallacy - Less Wrong

30 Post author: Z_M_Davis 12 April 2009 05:30PM

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Comment author: gwern 12 January 2011 08:11:40PM 2 points [-]

I think I would call it either the sunk cost fallacy, or the endowment effect/bias.

The latter because you are equally uncertain about whether its value will go up or go down, and so its value to you ought to be exactly its (current) cash-equivalent, and in fact, less because presumably you are risk-averse like all other humans (and so an equal chance of loss or gain is worse than a guaranteed no-loss/no-gain) - and yet you are still holding the stock.