Loss Aversion · Feb 2026
Sunk Cost Fallacy
The Sunk Cost Fallacy is the tendency to continue an endeavor
once an investment in money, effort, or time has been made. It keeps people in
bad projects and bad jobs. CLN forces you to wall off the past to see the
present clearly.
01/The Anatomy of the Trap
. Resource
Spent: Time, money, or emotion already gone.
. Loss
Aversion: The brain hates to "waste" the
investment.
! The
Fallacy: Pouring more resources into a losing
proposition to justify the past.
02/Isolate the Past
CLN Pattern
In CLN, we use specific operators to separate accounting from decision-making:
-
Historical Cost: Mark past spending with
-. It is a non-actionable fact.? Decision
Frame: Focus only on future
requirements and future value.
Spent: $50,000 / 6 months
Required: $30,000 / 4 months
03/Zero-Based Thinking
The only question that matters for ? DECISION lines:
"Knowing what I know now, would I start this today?"
*
Self-Test: If the answer is "No", what is the
CLN action? || Stop
immediately. The past investment is irrelevant to future
utility. ||
04Decision Example
=
CASE: Failing Software Project
- Spent: 2 years of
development.
.
Fact: Competitor just released a better version
for free.
? If starting fresh
today, would I build this?
- No → Kill project
(Stop the bleeding).
+
Result: Saved 1 year of future wasted effort.