ORGS 4560 Lecture Notes - Lecture 30: Sunk Costs
28 Apr 2018
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ORGS 4560
Lecture 30
• The Sunk-Cost Trap
o To make choices in a way that justifies past choices, even
when the past choices no longer seem valid
o Sunk costs – old investments of time or money that are now
irrecoverable
o Use these techniques:
▪ Seek out and listen carefully to the views of the people
who are uninvolved with earlier decisions
▪ Examine why admitting to an earlier mistake distresses
you
▪ Be on the lookout for the influence of sunk cost biases in
the decisions and recommendations made
▪ Don’t cultivate a failure-fearing culture
• The Confirming-Evidence Trap
o Leads us to seek out information that supports our existing
instinct or point of view while avoiding information that
contradicts it
o Affects how we interpret the information we receive and where
we collect it from
o Use these techniques:
▪ Always check to see where you are examining all the
evidence with equal rigor
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