Which term describes the tendency to continue investing in something because of past investment even when continuing is irrational?

• A. Intelligence
• B. Sunk-Cost Fallacy
• C. Framing
• D. Priming

Answer: (B)

The central idea here is that decisions about continuing a project should be based on future costs and benefits, not on what has already been spent. When people keep investing because of past investments, even though those investments cannot be recovered and continuing is irrational, they’re experiencing the sunk-cost fallacy. The past money, time, or effort is a loss that shouldn’t influence what you do next; what matters is whether continued investment will yield a better future payoff. So, the rational move would be to halt or change course if future benefits don’t justify more costs, regardless of how much has already been spent.

This concept is distinct from intelligence, which concerns general problem-solving ability; framing, which is about how presenting options changes choices; and priming, which involves how exposure to a stimulus influences later behavior.