What is sunk cost fallacy?

Sunk cost fallacy is a concept in personal epistemology: Define in advance what evidence would cause you to abandon a course of action.

Example: A startup founder sets three kill criteria before launching a new product line: if customer acquisition cost exceeds $200 after 90 days, if fewer than 50 users convert in the beta, or if the team misses two consecutive sprint deadlines. Two months in, acquisition costs hit $240 and beta conversions are at 31. The criteria fire. She kills the product line — not because she feels it's failing, but because she pre-committed to trusting the numbers over her emotions. Without those criteria, she would have kept spending, kept hoping, and kept justifying. The criteria didn't make the decision painful. They made the decision possible.

This concept is part of Phase 23 (Decision Frameworks) in the How to Think curriculum, which builds the epistemic infrastructure for decision frameworks.