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The Sunk Cost Fallacy: Persisting on the past

The Sunk Cost Fallacy refers to the situation where past investments prohibit us from pulling out of something that we have put effort into. According to Arkes and Blumer, “the Sunk Cost Effect is manifested in a greater tendency to continue an endeavor once an investment in money, effort, or time has been made.”

Cognitive Biases

Illusion of truth effect: You repeat, I believe

If statements are made again and again in a confident manner, without argument or proof, then their hearers will tend to believe them quite independently of their soundness and of the presence or absence of evidence for their truth. This phenomenon is known as The illusion of Truth.

Cognitive Biases

The Anchoring Effect: Relying on evidence at immediate reach

In many situations, people make estimates by starting from an initial value that is adjusted to yield the final answer. That is, different starting points yield different estimates, which are biased toward the initial values. We call this phenomenon the anchoring effect.

Economics / Terms and Concepts

The Cobra Effect: Unintended consequences

Countless examples of this theory can be observed in everyday life. A lot of policies that were brought into action to address a problem only worsened it. The Cobra Effect simply implies that public policy is not as easy as it sounds, and good intentions does not always lead to suitable results.