Psychology

Spot The Sunk-Cost Fallacy And Know When To Quit

The sunk cost fallacy applies to all of life’s investments.

In poker, an unlucky hand, an opponent’s provocation, general impatience, or bad luck may drastically impair a player’s decision making process. Regardless of ability or experience, when this is extreme, a player takes high-risks or consistently makes irrational moves, in a futile attempt to chase losses. In game terminology, this psychological trap is called tilt.