Category: General Knowledge | Last updated: 2026-09-18
A company has invested significant resources into a failing project. Despite mounting evidence that the project will not succeed and will incur further losses, the management decides to continue funding it, arguing that they have already spent too much to abandon it now. Which cognitive bias are they exhibiting?
A) Anchoring Bias
B) Sunk Cost Fallacy
C) Confirmation Bias
D) Dunning-Kruger Effect
Explanation
The Sunk Cost Fallacy is the tendency to continue an endeavor or investment simply because one has already invested time, effort, or money into it, even when the current costs outweigh the expected benefits.