Avoiding the Pitfalls of Sunken Cost Fallacy in Software Development

September 16, 2022

The sunken cost fallacy is a cognitive bias that affects decision-making in many aspects of life, including software development. It occurs when we make decisions based on the amount of money, time, or effort we have already invested in something rather than basing the decision on the potential merits of an action.

In software development, the sunken cost fallacy can be particularly dangerous. Software projects can be complex and costly, and it's easy to become emotionally and financially invested in them. When a project starts to go off track, it can be tempting to continue investing resources in an attempt to rescue it, even if it's clear that the project is doomed to fail. This is where the sunken cost fallacy can really hurt a software development team.

One of the reasons why the sunken cost fallacy is so prevalent in software development is that it's often difficult to know when a project is truly beyond saving. Developers can become so invested in a project that they lose sight of the bigger picture. They may convince themselves that they can turn things around with just a little more time or resources. Unfortunately, this is not always the case, and it's essential for developers to be honest and objective when assessing a project's chances of success.

One way to avoid the sunken cost fallacy is to regularly assess the progress of a project and be willing to make tough decisions when necessary. This means being willing to cut your losses and move on if a project is not meeting its goals or is unlikely to be successful. It's important to remember that this decision is not a failure but rather a smart business decision that can save time and resources in the long run.

Another way to avoid the sunken cost fallacy is to involve stakeholders in the decision-making process. This helps ensure that decisions are based on objective criteria rather than emotions or personal investment in a project. By involving stakeholders, you can get a fresh perspective on a project and make more informed decisions.

It's also important to remember that the sunken cost fallacy doesn't just apply to projects that are in trouble. It can also be seen in situations where a team is deciding whether or not to invest in a new project. After all, if they've already invested a lot of resources into a project, they may be tempted to continue investing instead of exploring new opportunities. This can lead to missed opportunities and a failure to innovate.

To avoid the sunken cost fallacy in these situations, it's important to regularly assess the potential of new projects and weigh them against the potential of continuing to invest in existing projects. This means letting go of existing projects if they are no longer viable and being open to exploring new opportunities.


In conclusion, the sunken cost fallacy is a common cognitive bias in software development that can lead to bad decision-making. It's essential for software developers to be aware of the fallacy and to make sure that they are making decisions based on merit rather than the amount of resources they have already invested. By regularly assessing the progress of projects, involving stakeholders in decision-making, and being willing to explore new opportunities, developers can help ensure that their projects are successful.

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