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A sideways look at economics

‘Thinks and Drinks’ and the sunk cost fallacy

12 July 2024|

For those who aren’t familiar, at Thinks and Drinks Fathom invites friends and clients to join us at a bar to socialise and discuss issues shaping the economy. Towards the end, there were three of us left with an already opened bottle of wine, and we were faced with the decision of whether to go back home, or stay to “get our money’s worth”. The day after, I realised that I had probably been subject to the sunk cost fallacy, where people choose to stick with something simply because a large amount of past resources has been invested in it. This concept applies to many situations, including business strategy. Or, if you’re Gareth Southgate, how long you wait before making a substitution.

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