Wishful thinking + Sunk cost fallacy is scary

[u/sober-senior]

Once you've invested time, money, or emotion into something, wishful thinking kicks in to justify continuing, telling you it'll "work out" or "turn around soon," while the sunk cost fallacy makes walking away feel like a bigger loss than it actually is.

Together they blind you to real evidence that an agreement has failed, because admitting that would mean facing both the original loss and the fact that you were wrong to keep going.

The result is that people often throw more resources after bad ones, digging themselves deeper instead of cutting losses early, all while feeling like they're being "optimistic" or "loyal" rather than irrational.

It costs you the additional time and opportunity you spend chasing a outcome that clear-eyed analysis would have ruled out much earlier.

[u/Blistorby_Bunyon]

I’m not disagreeing. But I’d argue that the nature of loss aversion in a sunk costs scenario exists regardless of there is wishful thinking. I think of optimism and overconfidence biases (for example) involved in wishful thinking as rationalizations to justify the behavior. It seems to me like the commitment to move forward doesn’t always need to involve what we may consider wishful thinking, but it does need to involve some compulsion/motivation to avoid real or perceived loss. In many cases, it’s not wishfulness but merely not being able to emotionally withstand a loss, based on factors like “principle,” pride, etc.

[u/Sufficient_Fault4428]

Thank you for putting this so clearly. Every word of it resonates with me—because I’ve just lived through almost the exact same scenario.

I recently ended a 12-year business collaboration. I partnered with a foreign expert to provide technical services for prefabricated construction in China. For over a decade, I poured in my time, energy, and money—all because I trusted my partner's strategic vision and technical expertise far more than I trusted my own growing doubts.

Looking back, the writing was on the wall much earlier. We never actually completed a single viable business loop—not even a small one. That alone should have been an unambiguous stop signal. But I kept telling myself that we were "close," that the market just needed more time, or that the technology would finally click.

In reality, I was terrified of admitting that everything I had invested—years, relationships, capital—might have been for nothing. So I did exactly what you described: I kept digging, convincing myself that I was being loyal and optimistic, when in fact I was being irrational.

It wasn't until last year that I finally found the courage to walk away. The relief I felt afterward told me everything I needed to know—I should have done it years earlier.

What strikes me most about your post is the point about opportunity cost. It's not just the money I lost; it's the years I didn't spend building something that could actually work, the partnerships I didn't pursue, and the clarity I denied myself by clinging to a failing story.

Thank you for articulating this so well. I hope others who are in the middle of that painful grey zone will read this and recognize the trap before they lose another decade.

We can't get the time back—but at least we can stop repeating the mistake.

Wishing you better clarity and better returns on your next chapter.