Bias/Heuristic

Commitment Bias

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Commitment bias, also known as escalation of commitment o the sunk cost fallacy, describes how people and groups are willing to support their past ideas and decision, even when new evidence or events makes doing so irrational. We also tend to interpret evidence in a way that makes our past idea seem better. This is a social and self-serving bias. Inconsistency is not a socially desirable attribute, so we try our best to avoid it, even if avoiding it has large costs. We also like to believe that we have made good choices and had good ideas, so we try not to abort ongoing commitments, even if it would be better to do so. This concept is notable in the field of finance, as investors will often hold a position longer than they should, because doing anything else would be admitting a loss.

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