You will be able to catch fallacies in your own reasoning, especially when you have already invested time or money.
Eight months ago Farhan's team started building a customer rewards feature. It is now four months late, early tests show customers barely use it, and finishing it will take another three months of two engineers' time. At the planning meeting someone says, "We've already put so much into this, we can't stop now." Heads nod. Farhan nods too, and on the way out he realises he does not actually agree.
The first two lessons in this module were about spotting fallacies in what other people say. This one turns the test inward. The fallacies that cost you most are often the ones you commit yourself, and they are hard to see because they feel like common sense.
A sunk cost is money, time or effort that has already been spent and cannot be recovered, whatever you decide next. The sunk cost fallacy is continuing something because of what you have already put in, rather than because of what you expect to get out of it from here.
The eight months on the rewards feature are gone. If the team stops today, they are gone. If the team carries on, they are still gone. They should play no part in the decision. The only things that differ between the two choices are the next three months of work and whatever the finished feature would bring in.
That gives you the one question worth asking: is the next dollar, or the next hour, worth it from where we stand now? Imagine you had just joined the company and someone offered you this half-built feature, with its weak test results, for the cost of three more months of work. Would you take the deal? If the answer is no, the eight months already spent do not change it.
The same trap shows up in daily life. You sit through a bad movie because you paid for the ticket. You keep a gym membership you have not used since March because you signed a twelve-month contract and "might as well get the value". You hold on to a course you dislike because you have paid half the fees. In each case, the money is spent either way. What remains is the choice between more time on something you do not want and that time back.
Note one honest limit. Sometimes stopping has its own real costs: a penalty for cancelling, a promise to a client, a team's morale. Those are future costs, so they belong in the decision. The fallacy is only about the past spending that you cannot get back.
Projects at work collect sunk costs faster than anything in your personal life, and stopping them is harder. Several forces push the same way.
Stopping feels like admitting the original decision was wrong, and the person who championed it may be in the room. Budgets were approved, and someone may have to explain why money was spent on nothing. The team has worked hard, and stopping can feel like telling them it was wasted. And there is always a reason to think the next three months will finally turn it around.
None of those forces is about the future value of the project. They are about pride, blame and how things will look. A useful move is to separate the two questions out loud. "Leaving aside what we've spent, would we start this today?" gives people permission to answer honestly without having to defend the past.
It also helps to set the conditions for stopping before a project starts. If the team had agreed at the outset that the feature would be reviewed if early tests showed low use, the meeting would be a check against an agreement, not an argument about failure. That is the rebuttal idea from lesson 1.3, Qualifiers and rebuttals make a claim stronger, applied to a plan, and lesson 6.2, Imagine it failed: the pre-mortem, builds on it.
The second trap in your own head has a Latin name too: post hoc ergo propter hoc, "after this, therefore because of this". Post hoc reasoning assumes that because B followed A, A caused B.
You started drinking green tea and your skin cleared up. A new manager arrived and sales went up. You wore your lucky shirt to the interview and got the job. In each case, B came after A, and it feels natural to connect them. But many other things changed at the same time. Skin changes with weather and stress, sales change with seasons and the economy, and you probably prepared well for the interview.
Post hoc reasoning is the bridge between this module and Module 4, which covers correlation and causation properly. For now, the habit is to notice when your only evidence that A caused B is that B came after it. When you catch yourself, ask what else changed around the same time, and whether B would have happened anyway.
At work, post hoc and sunk costs often appear together. A project gets a small win after a change, the change gets the credit, and the team decides to spend more. If the win was luck or the season, the extra money joins the pile of sunk costs.
The cure for both traps is the same: look forward, not back. Ask what the options are from here, what each will cost from here and what each is likely to bring. Treat what has already happened as information about what might happen next, not as a debt you have to repay by continuing.
Farhan writes one line to his lead after the meeting: "If we were starting today, with the test results we have, would we fund three more months on rewards?" It is a fair question, and it does not blame anyone.
Most people have at least one of these running in their own life right now: a subscription, a course, a side project or a commitment kept going mainly because of what has gone into it already. In the activity below you will pick one and decide about it as if you were starting from today.
List one project, subscription or commitment you are continuing mainly because of past spending, and decide from today's position.
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