Monday Morning Musings
Volume XXIV, Number 18 (Issue 1169) May 4, 2026
The Sunk Cost Fallacy
Sandy and I live in south central Texas. This region is prone to droughts. In fact, we have been in an extended period of drought for several years – the horrible, deadly flooding that occurred in the Texas Hill Country last July notwithstanding. You should also know that one of my hobbies is landscape gardening. Combine that passion and that reality and I have taken steps to xeriscape a large part of my yard – especially the front. Still, I prefer green over brown and I enjoy flowering plants along with the birds, bees, and butterflies that frequent our yard when those plants are in bloom.
Accordingly, at the first signs of spring I find myself frequenting the local garden store and loading up on all manner of plants – not all of which are drought tolerant. The consequence is that I spend time watering my yard and plants throughout the spring to give them a solid start. But then comes the hot, dry months of summer and I continue to water at the first evidence of stress on my yard/plants. In doing so I succumb to the sunk cost fallacy or the sort of thinking that says I have already invested so much time and money in nourishing and sustaining the landscape that I dare not abandon my efforts to the whims of nature. I have repeated this pattern including the internal debate every summer. Still I persist, knowing all the while that most years, though I may be winning the battle, I am losing the war.
I share this flaw of mine – one of many that I have – because I so often encounter organizations and their leaders doing the exact same thing. In doing so, these individuals are throwing good money after bad whenever they cling to product lines, processes, and facilities/locations (call them what they are: legacy decisions) that no longer make economic sense. Those decision-makers’ unspoken hope is that those things will turn around with just a bit more time and effort (investment). Of course, most will never turn around if for no other reason that so much around them is changing that they are becoming increasingly inefficient and irrelevant.
If resources were infinite, holding on to things a bit longer might be acceptable, even justified. But resources are not infinite. Quite the contrary. Because we do live in a world where obsolescence is all but assured, putting good money after bad, i.e., yielding to the sunk cost fallacy, has the effect of getting in the way of needed innovation.
Thus, the next time you begin to question if you are doing the right thing by sticking with something that is producing diminishing results, trust your mind and not your heart. In other words, do not allow your ego to stop you from doing the right thing. For myself, I will try to do likewise in 2027 when spring rolls around and my desire for a beautiful yard and landscape is confronted with the more likely scenario of a long, hot, and dry summer.
Soli Deo Gloria
“Look carefully then how you walk, not as unwise but as wise, making the best use of the time, because the days are evil. Therefore do not be foolish, but understand what the will of the Lord is.” Ephesians 5:15-17
J. Keith Hughey
Mobile: (210) 260-0955
E-mail: keith@jkeithhughey.com
Website: www.jkeithhughey.com
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