My understanding is that the karma toll is charged only when responding to downvoted posts within a thread, not when responding to the OP.
You could be correct there.
I didn't say that the only correct definition is the most popular one; you are shading my position to make it more vulnerable to attack. My position is merely that if, as you yourself said, "everybody" uses a different definition, then that is the definition. You said "everybody is silently ignoring what the fallacy actually refers to". But what a term "refers to" is, by definition, what people mean when they say it. The literal meaning (and I don't take kindly to people engaging in wild hyperbole and then accusing me of being hyperliteral when I take them at their word, in case you're thinking of trying that gambit) of your post is that in the entire world, you are the only person who knows the "true meaning" of the phrase. That's absurd. At the very least, your use is nonstandard, and you should acknowledge that.
There's a conditional in the sentence that specifies "everybody". "So if I'm arguing against a straw man..."
I don't think I -am- arguing against a straw man. As I wrote directly above that, I think your understanding is drawn entirely from the examples you've seen, rather than the definition, as written on various sites - you could try Wikipedia, if you like, but it's what I checked to verify that the definition I used was correct when you suggested it wasn't. I will note that the "Sunk Cost Dilemma" is not my own invention, and was noted as a potential issue with the fallacy as it pertains to game theory long before I wrote this post - and, indeed, shows up in the aforementioned Wikipedia. I can't actually hunt down the referenced paper, granted, so whether or not the author did a good job elaborating the problem is a matter I'm uninformed about.
Presumably, your line of thought is that what you just presented is absurd, and therefore it must be wrong. I have two issues with that. The first is that you didn't actually present what your thinking was. That shows a lack of rigorous thought, as you failed to make explicit what your argument is. This leaves me with both articulating your argument and mine, which is rather rude. The second problem is that your syllogism "This is absurd, therefore it is false" is severely flawed. It's called the Sunk Cost Fallacy. The fact that it is illogical doesn't disqualify it from being a fallacy; being illogical is what makes it a fallacy.
"Illogical" and "Absurd" are distinct, which is what permits common fallacies in the first place.
I sincerely believe that you are using the phrase "sunk cost fallacy" that is contrary to the standard usage, and that your usage impedes communication. I attempted to inform you of my concerns, and you responded by accusing me of simply trying "score points". I do not think that I have been particularly rude, and absent prioritizing your feelings over clear communication, I don't see how I could avoid you accusing me of playing "games of trivial social dominance".
Are you attempting to dissect what went wrong with this post?
Well, initially, the fact that everybody fought the hypothetical. That was not unexpected. Indeed, if I include a hypothetical, odds are it anticipates being fought.
It was still positive karma at that point, albeit modest.
The negative karma came about because I built the post in such a way as to utilize the tendency on Less Wrong to fight hypotheticals, and then I called them out on it in a very rude and condescending way, and also because at least one individual came to the conclusion that I was actively attempting to make people less rational. Shrug It's not something I'm terribly concerned with, on account that, in spite of the way it went, I'm willing to bet those who participated learned more from this post than they otherwise would have.
Perceiving an assertion of error as being a dominance display is indeed something that the primate brain engages in. Such discussions cannot help but activate our social brains, but I don't think that means that we should avoid ever expressing disagreement.
I'll merely note that your behavior changed. You shifted from a hit-and-run style of implication to over-specific elaboration and in-depth responses. This post appears designed to prove to yourself that your disagreement has a rational basis. Does it?
My immediate motive is to impart knowledge. I suppose if one follows the causal chain down, it's quite possible that humans' desire to impart knowledge stems from our evolution as social beings, but that strikes me as overly reductionist.
Case in point.
Let's suppose that is your motive. What knowledge have you imparted? Given that you're concerned that I don't know what it is, where's the correct definition of the Sunk Cost Fallacy, and how does my usage deviate from it? I'd expect to find that somewhere in here in your quest to impart knowledge on me.
Your stated motive doesn't align with your behavior. It still doesn't; you've dressed the same behavior up in nicer clothes, but you're still just scoring points in an argument.
So - and this time I want you to answer to -yourself-, not to me, because I don't matter in this respect - what exactly do you actually want out of this conversation?
The negative karma came about because I built the post in such a way as to utilize the tendency on Less Wrong to fight hypotheticals, and then I called them out on it in a very rude and condescending way, and also because at least one individual came to the conclusion that I was actively attempting to make people less rational. Shrug It's not something I'm terribly concerned with, on account that, in spite of the way it went, I'm willing to bet those who participated learned more from this post than they otherwise would have.
Is that "the end justifies the means"?
Summary
How should a rational agent handle the Sunk Cost Dilemma?
Introduction
You have a goal, and set out to achieve it. Step by step, iteration by iteration, you make steady progress towards completion - but never actually get any closer. You're deliberately not engaging in the sunk cost fallacy - at no point does the perceived cost of completion get higher. But at each step, you discover another step you didn't originally anticipate, and had no priors for anticipating.
You're rational. You know you shouldn't count sunk costs in the total cost of the project. But you're now into twice as much effort as you would have originally invested, and have done everything you originally thought you'd need to do, but have just as much work ahead of you as when you started.
Worse, each additional step is novel; the additional five steps you discovered after completing step 6 didn't add anything to predict the additional twelve steps you added after completing step 19. And after step 35, when you discovered another step, you updated your priors with your incorrect original estimate - and the project is still worth completing. Over and over. All you can conclude is that your original priors were unreliable. Each update to your priors, however, doesn't change the fact that the remaining cost is always worth paying to complete the project.
You are starting to feel like you are caught in a penny auction for your time.
When do you give up your original goal as a mirage? At what point do you give up entirely?
Solutions
The trivial option is to just keep going. Sometimes this is the only viable strategy; if your goal is mandatory, and there are no alternative solutions to consider. There's no guarantee you'll finish in any finite amount of time, however.
One option is to precommit; set a specific level of effort you're willing to engage in before stopping progress, and possibly starting over from scratch if relevant. When bugfixing someone else's code on a deadline, my personal policy is to set aside enough time at the end of the deadline to write the code from scratch and debug that (the code I write is not nearly as buggy as that which I'm usually working on). Commitment of this sort can work in situations in which there are alternative solutions or when the goal is disposable.
Another option is to discount sunk costs, but include them; updating your priors is one way of doing this, but isn't guaranteed to successfully navigate you through the dilemma.
Unfortunately, there isn't a general solution. If there were, IT would be a very different industry.
Summary
The Sunk Cost Fallacy is best described as a frequently-faulty heuristic. There are game-theoretic ways of extracting value from those who follow a strict policy of avoiding engaging in the Sunk Cost Fallacy which happen all the time in IT - frequent requirement changes to fixed-cost projects are a good example (which can go both ways, actually, depending on how the contract and requirements are structured). It is best to always have an exit policy prepared.
Related Less Wrong Post Links
http://lesswrong.com/lw/at/sunk_cost_fallacy/ - A description of the Sunk Cost Fallacy
http://lesswrong.com/lw/9si/is_sunk_cost_fallacy_a_fallacy/ - Arguments that the Sunk Cost Fallacy may be misrepresented
http://lesswrong.com/lw/9jy/sunk_costs_fallacy_fallacy/ - The Sunk Cost Fallacy can be easily used to rationalize giving up
ETA: Post Mortem
Since somebody has figured out the game now, an explanation: Everybody who spent time writing a comment insisting you -could- get the calculations correct, and the imaginary calculations were simply incorrect? I mugged you. The problem is in doing the calculations -instead of- trying to figure out what was actually going on. You forgot there was another agent in the system with different objectives from your own. Here, I mugged you for a few seconds or maybe minutes of your time; in real life, that would be hours, weeks, months, or your money, as you keep assuming that it's your own mistake.
Maybe it is a buggy open-source library that has a bug-free proprietary version you pay for - get you in the door, then charge you money when it's more expensive to back out than to continue. Maybe it's somebody who silently and continually moves work to your side of the fence on a collaborative project, when it's more expensive to back out than to continue. Not counting all your costs opens you up to exploitative behaviors which add costs at the back-end.
In this case I was able to mug you in part because you didn't like the hypothetical, and fought it. Fighting the hypothetical will always reveal something about yourself - in this case, fighting the hypothetical revealed that you were exploitable.
In real life I'd be able to mug you because you'd assume someone had fallen prone to the Planning Fallacy, as you assumed must have happened in the hypothetical. In the case of the hypothetical, an evil god - me - was deliberately manipulating events so that the project would never be completed (Notice what role the -author- of that hypothetical played in that hypothetical, and what role -you- played?). In real life, you don't need evil gods - just other people who see you as an exploitable resource, and will keep mugging you until you catch on to what they're doing.