Behavioral economics was right: The Sunk Cost Fallacy

Behavioral economics is the branch of economics that studies the effects of our emotions, cultural influences and many other things ultimately related to our psyche on the economics decisions we make. Remember the (neo)classics: we are perfectly rational and, as such, act according to strict cost-benefit comparisons. Behavioral economics, on the other hand, says “screw that!” and dives deeper into the human behavior (duh) in order to gain better understanding of our choices. Continue reading “Behavioral economics was right: The Sunk Cost Fallacy”