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Sunk cost fallacy & Escalation of commitment in project management

  • Writer: Danil
    Danil
  • Oct 3
  • 4 min read

Updated: Oct 11

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What Are Sunk Cost Fallacy and Escalation of Commitment?


If you spend time in communities of nonprofits, cultural workers, or small mission-driven teams, you’ll notice a familiar pattern:


“We keep doing the same thing, even when it clearly doesn’t work.”

It usually comes packaged as:

  • “This is what we’ve always done.”

  • “It’s part of our mission.”

  • “We already invested too much to stop now.”


Let’s unpack what’s really behind these phrases and look at two behavioral traps that keep this cycle alive: the sunk cost fallacy and escalation of commitment.


Sunk Cost Fallacy


It’s a cognitive bias: we keep investing in a project just because we’ve already spent time, money, or effort — even when it no longer makes sense.


It comes from our fear of losing what we’ve already put in, and from not wanting to feel regret.


Sometimes it gets even harder to change direction, because it feels like stopping would mean everything was for nothing. We trick ourselves into believing that all the hours, energy, and money already invested would be wasted.


In those moments, instead of asking “Should we keep going, and why?” we end up stuck on “Wouldn’t it be a waste to stop now?”

Escalation of Commitment


It’s a behavioral pattern, especially common in teams and leadership decisions. We keep backing a failing course of action because we want to look consistent or committed.


This is often intensified by social pressure, identity, the mission of the organization, team culture, or just plain inertia.


And yes, it’s usually driven by fear: fear of letting the team down, of losing face, of disappointing partners.

Because real leaders never make mistakes, right?

So we keep pushing a struggling idea forward, not because it’s working, but because turning around feels harder.


Examples

1. Sunk Cost Fallacy: Giving a Guide That Nobody Used

In a student EA (Effective Altruism) organization, members created a detailed “Giving Guide” to promote effective donations.


But few read it, and even fewer used it.


“A few people dropped out because of the workload… We didn’t really have much traction.”

Still, they continued to improve the guide, redesign the website, and publish updates.


“The new guide page has so far not resulted in any significant impact.”

This is a clear sunk cost trap: continued investment in a strategy that has shown no results simply because it has already required effort.

2. Escalation of Commitment: Podcast With No Listeners (a story for Reddit)

A team ran a podcast for years — 184 episodes — without growth, engagement, or income. 

Despite this, they continued producing episodes, hoping something would eventually click.


“We get less than 30 listens per episode on a GOOD week… I’ve been doing this for so long, making no money at all. I’m starting to lose motivation.”

Yet they ask:


“How do we push through this?”

Rather than pivoting or pausing to assess, they escalated their commitment, investing more time, energy, and resources, yet achieving the same outcomes.

Why this matters in small initiatives


Both sunk cost fallacy and escalation of commitment make it harder to stop, pivot, or shut something down when resources are limited. If we admit something isn’t working, we’re afraid we won’t have the strength or resources left for a relaunch, a pivot, or a new start. So we keep dragging it along as long as we can.


Here’s why that’s dangerous in mission-driven and under-resourced environments:


1. The mission can become a trap.


Emotional attachment to a mission often makes walking away feel like personal failure.


In purpose-driven teams (and especially in small ones) there’s a deep sense of responsibility to the cause, to the community, to the people who believed in the work.


That attachment can turn into tunnel vision: sticking with a project that isn’t delivering impact feels like betraying the mission or disrespecting past efforts. Sometimes this is called “mission lock-in,” when commitment turns into rigidity.


2. There’s no built-in stop signal.


In small teams, you don’t have a board, investors, or outside pressure telling you when to stop. There’s no external opinion.


This means the discipline to pause, reassess, or walk away must come from within. Without clear decision-making frameworks, stopping feels like quitting or worse, like wasting all the previous effort. Classic sunk cost thinking.


3. Every decision has higher stakes.


In contexts where budgets are tight and people are already stretched, any decisions cost more not just in money, but in trust, motivation, and capacity.


That’s why recognizing these patterns isn’t theory. It’s a survival skill.


What you we do


  • Set exit checkpoints upfront.

Example: “If engagement remains low after 3 months, we pause and reassess.”


  • Write decision logs.

Something like: “We decided to do X because Y, under conditions Z.” This way you can always come back to why you made a decision. Memory has a funny way of rewriting reasons once time has passed.


  • Build a culture where stopping is allowed.

    Ending something ≠ failure. It means you’re making space for something else.


  • Share decisions with the team.

    Write them down and say them out loud. It keeps everyone aligned, prevents silent doubts, and makes it easier to spot when conditions change.


  • Invest in feedback loops.

    Collect input from your audience, partners, stakeholders, or expert peers — and don’t just gather it. Invest time in analysis and open discussion, so lessons turn into action.


And of course, this list isn’t final.

Feel free to add your own ideas in the comments or by sending me an email (danil@youcanmakeit.work).


Sources


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