Why do we waste resources defending past bad choices?

The sunk cost fallacy is our irrational tendency to continue investing in something because of previously invested resources that cannot be recovered. If you've paid $50 for a movie ticket but the film is terrible, continuing to watch wastes your time—yet many do exactly this because they've 'already paid.' Psychologist Richard Thaler popularized this concept in the 1980s. The fallacy occurs because we treat past investments as reasons for future decisions, though logically, only future costs and benefits should matter. Recognizing sunk costs are irrelevant is crucial for rational decision-making.