Frank Sinatra says that clearly, and Rolf Dobelli, the author of a book titled: “The art of thinking clearly,” quoted that song to explain the concept of the availability bias — something that happens daily but too often goes unnoticed and could be disastrous for people.
Rolf Dobelli, the author of a book titled: “The art of thinking clearly,” says reciprocity used to be the way of survival. When the hunter-gatherer communities wanted to maintain their groups, they tried to help each other with other groups. One day, they gave meat, and the next time they took.
Reprocity now is being utilized as the way in marketing and lobbying that could be different aims as it was used in ancient periode.
Cutting losses is an option to reduce future cost but it is hard to do as people are reluctant to leave it.
If you know that you can’t repair the condition, you should leave it. You let it’s gone even though you have already spent much money there. Well, it is so emotional.
We probably avoid sunken cost.
But here’s one importan thing: letting the loss becomes so large is not a good way to go.
Non-recoverable investments mean you can no longer take profit. The option to hold the investment is normal when you predict it will benefit in future. if not, you just keep someting that will cost you later.
Be wary, sunken cost fallacy is every where: not only in trading foreign exchange but also in everyday life.