(also known as: concorde fallacy)
Description: Reasoning that further investment is warranted on the fact that the resources already invested will be lost otherwise, not taking into consideration the overall losses involved in the further investment.
X has already been invested in project Y.
Z more investment would be needed to complete project Y otherwise X will be lost.
Therefore, Z is justified.
I have already paid a consultant $1000 to look into the pros and cons of starting that new business division. He advised that I shouldn’t move forward with it because it is a declining market. However, if I don’t move forward, that $1000 would have been wasted, so I better move forward anyway.
Explanation: What this person does not realize is that moving forward will most likely result in the loss of much more time and money. This person is thinking short-term, not long-term, and is simply trying to avoid the loss of the $1000, which is fallacious thinking.
Example #2: There are ministers, priests, pastors, and other clergy all around the world who have invested a significant portion of their lives in theology, who can no longer manage to hold supernatural beliefs -- who have moved beyond faith. Hundreds of them recognize those sunk-costs and are searching for the best way to move on (see http://www.clergyproject.org) whereas many others cannot accept the loss of their religious investment, and continue to practice a profession inconsistent with their beliefs.
Explanation: Of course, the clergy who have not moved beyond faith and are living consistent with their beliefs have not committed this fallacy.
Exception: If careful evaluation of the hypothetical outcomes of continued investment versus accepting current losses and ceasing all further investment have been made, then choosing the former would not be fallacious.
Tip: Is there any part of your life where you continue to make bad investments because you fear losing what was already invested?