The Sunk Cost Fallacy: Know When To Quit.

A Less known Bias That Will Cost You Money And Time

Let’s say you’re planning your next summer vacation. So you hit google and find a few different destinations you’d like to visit this year.

You find a trip to Egypt, a country you’ve always wanted to visit, but it’s not on top of your list. The travel package includes a plane ticket and a stay at a hotel for a total of $3000. This package is non-refundable, but you couldn’t find anything better, so you went for it and booked the trip.

The next day you do some more googling and voila, you find another amazing deal to Costa Rica, your most desired destination. The travel package also comes with a plane ticket and includes a stay at a luxurious resort.

To top it off, they have a special running for just $1000. Wow !! (mind-blown)

Again, the ticket is non-refundable. But since you’ll be taking two separate breaks this summer, you decide to book this trip as well.

So far, so good. You get two vacations trips to two places you’ve always wanted to go including your favorite destination at a heavily discounted price.

Later that day you’re horrified when you realize that you’ve made a huge mistake. You accidentally booked the trip to Costa Rica the same week as your trip to Egypt. Unfortunately, both bookings are nonrefundable, the hotels are full and you can’t even change the dates.