From the perspective of a model of decision making that is future oriented, being sensitive to sunk costs is a mistake.
In Barry Schwartz's book, "The Paradox of Choice: Why More Is Less," he discusses decision-making processes and highlights the pitfalls of allowing past investments, known as sunk costs, to influence future choices. A future-oriented approach to decision-making suggests that focusing on what lies ahead rather than what has already been spent or lost is more beneficial. Sunk costs can lead to irrational decisions, pulling individuals back instead of enabling them to progress based on current circumstances and opportunities.
Emphasizing a forward-looking perspective, Schwartz argues that individuals should make choices that reflect their present values and potential outcomes rather than being hindered by previous expenditures. Recognizing that past costs are irrecoverable can liberate decision-makers, allowing them to act based on future benefits rather than being weighed down by unfavorable past decisions. This shift in thinking can lead to more rational and productive choices in life.
