Sticky Idea

Loss aversion vs The sunk cost fallacy

Both make us cling to bad bets, but loss aversion is the feeling (losses hurt about twice as much as equal gains), while the sunk-cost fallacy is the behaviour it drives (throwing good money after bad).

	Loss aversion	The sunk cost fallacy
What it is	The pain of a loss feels ~2x an equal gain	Continuing because of costs already spent
Type	An emotional bias	A decision error it causes
The tell	You avoid locking in any loss	You justify staying by what you've already put in

Which matters when?

Loss aversion is why losing stings; the sunk-cost fallacy is what that sting makes you do — keep pouring effort into something only because you already have. Loss aversion is the cause; the sunk-cost fallacy is one of its most expensive effects.

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