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.)

You haven't made an argument that indirect funding is the best way to go and you've made baseless claims. There's nothing to respond to: the burden of proof is on anyone who claims that bizarrely indirect mechanisms through flawed actors with considerable incentive to overstate efficacy and do said indirect mechanism (suppose funding the Apollo Project was an almost complete waste of money compared to the normal grant process; would NASA ever under any circumstances admit this?) is the best or even a good way to go compared to directly incentivizing the goal through contests or grants.

You haven't made an argument that indirect funding is the best way to go

On this point we are in agreement. I'm not making any assertions about what the absolute best way is to fund research.

and you've made baseless claims.

Please be more specific.

There's nothing to respond to: the burden of proof is on anyone who claims that bizarrely indirect mechanisms through flawed actors

All humans are flawed. Were you perhaps under the impression that research grant applications get approved or denied by a gleaming crystalline logic-engine handed down to us... (read more)

0Jiro12y

That's like asking "If homeopathy worked and all the doctors were wrong, would they admit it?" You can't just flip a bit in the world setting Homeopathy_Works to TRUE and keep everything else the same. If homeopathy worked and yet doctors still didn't accept it, that would imply that doctors are very different than they are now, and that difference would manifest itself in lots of other ways than just doctors' opinion on homeopathy. If funding the Apollo Project was a complete waste of money compared to the normal grant process, the world would be a different place, because that would require levels of incompetency on NASA's part so great that it would get noticed. Or for another example: if psi was real, would James Randi believe it?

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Is Sunk Cost Fallacy a Fallacy?

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Is Sunk Cost Fallacy a Fallacy?

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