Are You Invested? A Primer In Sunk Cost Fallacy for Therapists.

A reflection on cognitive biases in therapy. Thinking fast, thinking slow. Thinking high, thinking low. With a little dig in the end.

A client comes to therapy, deeply concerned about the state of his relationship, which he believes is beyond repair. They barely speak, there is no intimacy, and neither partner is making any effort to change the situation. The therapist agrees—the relationship has been toxic for over a year and indeed seems irreparable.

However, when it comes to officially ending the relationship and making concrete moves to sell the house they own together, the client hesitates, saying, "I've lived like this for a year already; I might as well stick it out another year or so to see what happens."

Another year passes, and nothing has changed. Yet again, when considering making a change, the client decides, "Well, I've already waited two years; I might as well wait a bit longer."

The client is caught in the grips of the sunk cost fallacy.

The Sunk Cost Fallacy As a Cognitive Bias

The sunk cost fallacy is an irrational tendency to persist with something we have already invested in, even when the outcome is negative, simply because of the prior investment. The fallacy lies in the fact that the investment is already gone, making it a sunk cost. The rational approach would be to stop further investment and cut the losses. This cognitive bias is also known as 'plan continuation bias,' where we continue with a plan regardless of its effectiveness, because we have already committed resources to it.

A simple example of the sunk cost fallacy is when you buy a ticket to see a movie. Once the movie starts, you realise it’s terrible, but you decide to stay and watch it anyway because you have already paid for the ticket. You think, 'I might as well watch it now, otherwise the money will be wasted.' However, the cost of the ticket is already lost (a 'sunk cost'), so the rational decision would be to avoid wasting more resources—like your time—on a failed endeavor.

Although the sunk cost fallacy is most easily understood through economic decision-making, it extends to all areas of our lives: material, emotional, intellectual, and even spiritual. And I will elaborate later on how.

The sunk cost fallacy is a type of cognitive bias. A cognitive bias is essentially a thinking error, where we believe our decisions or conclusions are rational, but when examined objectively, they don't hold up. They are a psychological heuristic, a cognitive short-cut of sorts.

Some other famous examples of cognitive biases include the confirmation bias, hindsight bias, and the availability heuristics.

Daniel Kahneman, who has co-received a Nobel prize for his work around cognitive biases describes these mechanisms in his book 'Thinking Fast and Slow', referring to two different systems that we possess to make decisions:

• System 1: a sort of heuristic thinking that makes us prone to cognitive bias. Fast thinking.

• System 2: deploying logic and rationality to reach optimal decisions. Slower thinking.

Historically, I was introduced to cognitive biases by the book "You Are Not So Smart" (and its accompanying podcast) full of dry humour and sharp insight.

While it somehow became the domain of economists and behaviour science folks (indeed, Daniel Kahneman received the Nobel prize in economy for his discoveries) I think the cognitive biases pertain to all aspects of the complicated cognitive-affective lives of humans, and are therefore the domain of psychotherapy too.

As therapists we stand to gain a lot by being familiar with the idea of cognitive biases in general and the sunk cost fallacy in particular.

Being Invested - The Script as a Sunk Cost Fallacy

In therapy, we often discuss the concept of being invested. Humans are invested in the choices they make over their lifetime, in the psychic energy committed to certain beliefs about life or others, and in the sacrifices made to uphold certain truths and ways of living.

Putting those into question, while sometimes instrumental for the work of therapy, can be painful, precisely because of that 'investment'. Changing something we have long believed in can feel like acknowledging that the time spent was based on an illusion. It is a symbolic blow, and the emotional price for accepting is sometimes just too high.

Isn't this a form of a sunk cost fallacy, too? In its psychotherapy manifestation.

I argue that addressing it with the client in this form can lead to unexpected benefits and insights. Recognising it as a sunk cost can trigger a 'light-bulb moment' that facilitates change.

Sunk Cost Fallacy of Psychotherapy Theories

But as therapists, how often do we fall victim to the sunk cost fallacy when it comes to choosing the way we work?

Take me for example. I have spent past five years of my life, give or take, obsessing over neuroscience and psychotherapy  (as some of you are well aware). If tomorrow it were revealed that this path is a dead-end, how likely would I be to simply abandon it, accept my previous intellectual and clinical choices as mistaken, and embrace a new direction?

Real talk: very unlikely.

In fact, Joseph LeDoux nearly shattered my neuro-geek aspirations with his paper (with other co-authors) 'Putting the “mental” back in “mental disorders": a perspective from research on fear and anxiety'. But he hasn't done it quite to the full, so I am still sticking with the neuroscience. For now.

Some people have invested even more. Way more. Whole careers. Thousands and thousands in training. Countless hours.

Sometimes, the stakes are even higher, with significant income streams and successful subsidiaries built upon their original beliefs.

Besides the material side of things, there is also their reputation, enormous amounts of psychic energy, countless hours of mental effort taken away from ordinary life. The stakes are incredibly high.

The greater the 'investment', the harder it becomes to let go. The higher the stakes, the stronger the grip of the sunk cost fallacy.

It is sunk cost fallacy on steroids.

Consider the psychoanalysis wars, which have persisted across generations. Even today, some people debate the scholarly questions of psychoanalysis with a fervor that seems hard to comprehend from any practical point of view.

That and other similar debates serve as living testimonies of how individuals’ sunk cost fallacies, combined with significant egos, can draw many people and whole professions into their wake.

Interesting from an anthropological standpoint. Less interesting from the perspective of becoming a good psychotherapist.

Knowing When to Cut the Losses.

As therapists we stand to gain a lot from understanding the cognitive biases of our clients. Using these ideas in therapy work can be eye-opening.

Other times it is more about us, therapists and our cognitive biases. About how we make decisions about what we believe, and why we stick to it.

But for therapists and clients alike, it is important to know when to cut our losses.

As always, thank you for reading. For updates you can follow me on BlueSky or Twitter or subscribe to my mailing list.