"It's All for Nothing" (The Sunk Cost Fallacy)*

*Another in a series of posts about mental models and cognitive biases.

Life teaches lessons every day. The "Sunk Cost Fallacy" can keep us in the game, project, or investment despite everyone else seeing it's a loser. 

Imagine you're playing poker (Annie Betts was a WSOP champion). You've made an initial bet and raised. After the flop (five cards in), you realize that with three players continuing to bet and your dog of a hand, it's better to fold. Do you "throw good money after bad and stay in?" You don't. What's in the pot is "sunk cost," whether it's your ante or additional bets. What's gone is gone. 

In sports, watch how often teams stick with "bonus babies," high round draft choices, or expensive acquisitions (e.g. free agents), unwilling to "fold." Poor management stays consistent to a prior commitment that hasn't paid.

It's not 'local'. The Supersonic Transport (SST) Concorde was so famous it became shorthand: the “Concorde fallacy.” It stayed flying beyond any economic rationale to justify its cost and national 'prestige'. 

A research study from sports: "In the NFL, salary cap value represents a significant sunk cost to teams. We use the structure of the NFL draft to conduct a fuzzy regression discontinuity design. Optimal bandwidth local linear results suggest a 10% increase in salary cap value yields an additional 2.7 games started, for players selected near the cutoff between the first two rounds. Despite being no more productive, the first round selections receive a compensation premium, which leads to them starting significantly more games."

From AI: 

Across business, defense, and sports, the same mechanism repeats:

1. Big up-front commitment (money, prestige, draft capital, political capital)

2. Early signals of mismatch (market fit, threat environment, performance data)

3. Narrative defense (“we can’t waste what we’ve spent”)

4. Escalation (more time/resources)

5. Late-stage forced admission (shutdown/cancellation/trade/benching)

There's no "compensation premium" in high school sports. There's no NIL payout, no draft choice effect, and no 'seniority system' guaranteeing upperclassmen more playing time. 

Work hard, earn your opportunity, and be ready to perform. 

Lagniappe. Be humble, be coachable, stay hungry. "You can't be a good coach if your players don't let you." 

“A coach's greatest gift is a group of guys that want to be coached, want to be led."

(Via @coachajkings 🎥)

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— Hoop Herald (@TheHoopHerald) March 1, 2026