Also known as the Concorde Effect, sunk cost fallacy, or our boys shall not have died in vain fallacy. In economics, any past investment which cannot be altered by present or future actions is considered to be sunk cost. The Concorde fallacy is the act of allowing sunk cost to affect future investment decisions.

For example:

Mister Personguy has decided to propose marriage to Manipulative Shrew, his girlfriend of two years. Since he is a rather frugal individual, Personguy purchases an engagement ring for $0.50 cents from a vending machine just inside the entrance to his local Wal Mart Superstore. With a thrill in his heart and a spring in his step, he walks the two blocks to Manipulative's house.

Personguy knocks on Manipulative's door, but there is no answer. The door, as it happens, is unlocked. So, whistling to himself, Personguy lets himself in to look around for his girlfriend. He finds her in the bedroom, knees to the sky, with Studly MacMilkman firmly situated between her thighs.

Mister Personguy decides that he would rather not marry Manipulative Shrew after all. Unfortunately, the sign above the vending machine expressly stated, "NO REFUNDS," and he is doubtful that he can find anyone to purchase the ring for what he paid. He briefly considers saving the ring for a more deserving young lady who he may meet at a later time, but feels that this would be awfully low class of him. The $0.50 cent purchase price Mister Personguy paid for the engagement ring is a sunk cost.

However, Personguy positively hates the thought of wasting money. Crestfallen, he nods hello to Studly MacMilkman (who returns the gesture and goes about his business without missing a beat) and says to Manipulative Shrew, "Hello, sweetheart. I have something for you." She is too busy getting some to pay attention to her boyfriend, so he simply presses the plastic egg into her hand, which is now slick with Studly's sweat. He then proceeds to have a lengthy, one-sided conversation with her about the totality of their relationship, his plans for his future, and his hope for hers.

Because his decision to give the engagement ring to Manipulative Shrew was based solely on the sunk cost of the ring's purchase price, Mister Personguy has committed a Concorde fallacy. From an economist's perspective, it was irrational of him to consider the $0.50 cents as a contributing factor to any future decision. He may have wasted his money, but now he is wasting his breath as well.

It is important to note that Mister Personguy's decision would be just as irrational if the cost of the ring were much greater, say $50,000.00 instead of $0.50. Once that investment has been made and there is no way to recover it, it is a sunk cost. He may feel worse about having lost a greater amount of money (he is, after all, quite a thrifty spender), but, as they say, what's done is done.

The Concorde fallacy is so-called because the British and French governments continued to fund the Concorde project long after it was determined that it would likely never yield a profit. It was very nearly cancelled, but strong political pressure (to avoid wasting public resources) and myriad legal troubles prevented both France and Britain from pulling the plug.

These concepts are not limited to the field of economics, of course. It is very easy to see how the ideas of sunk cost and the Concorde fallacy can relate to warfare, evolutionary theory, sociology, and interpersonal relationships.

The Concorde Fallacy is the philosophy that if you realise a project is doomed to failure, it's better to cut your losses than insist on finishing.

This is a horribly defeatist strategy, and worse, it doesn't always apply.

1. You can be wrong

On one occasion, we were travelling to an airport when the radio warned that all flights by our airline that day had been cancelled. Rather than waste the effort, we continued on. It emerged that the news report was slightly exaggerated, and the company was able to secure us alternative seats.

2. A half-success is better than none

A party of adventurers has battled through two levels of an ancient dungeon in the belief that it contains a powerful book of spells worth forty thousand gold pieces. Suddenly, the wizard realises they're in the wrong dungeon and the treasure in this one is only worth ten thousand. They continue on regardless, because ten thousand is still worth it.

3. Your luck may change

A scientist discovers a way to create limitless energy, but is pressed to abandon years of research when it's discovered only to work in zero-gravity. Five years later, another scientist discovers anti-gravity. The first scientist laments his decision, and cold fusion is delayed by another five years.

4. Other factors are at stake

There are other important factors than achieving a goal. Your reputation may be at stake, or customer satisfaction may ride on the fallacy. Concorde itself may have inspired a generation of aerospace engineers, and the lessons learned from the project may prove invaluable in the long run.

5. Bravery is commendable

There's a fine line between stupidity and bravery. Sometimes it's important to set an example. Sometimes, if the stakes are high enough, you just have to kick reason to the kerb, pierce the heavens, and so on.

When the Concord Fallacy applies

Sometimes, you genuinely can't win. In such a case, any further expenditure is further loss, at least as far as pertains your impossible goal. Some projects realise this before they even begin, others three years and twelve-billion of government money later.

Take an example: Say an ancient general marches his troops for ten weeks to capture a walled city. When he gets there, it turns out that the city is well-defended. If he retreats now his march is wasted; on the other hand, if he lays siege, he may waste ten months and half of his men, in addition to wasting his ten week march.

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