The film Everest, released in 2015, told the story of a group of experienced climbers who scaled the mountain in 1996. At the time so many groups were climbing to the summit that different attempts had to be scheduled. One safety rule on Everest is that if you don’t reach the summit by 2.00 pm, then you have to descend and head back to camp before nightfall. As the different groups ascended, they experienced delays. Although some abandoned their ascent after the allotted time, many experienced climbers, frustrated by being so close to their goal, continued to the summit. When they descended, bad weather, increasing darkness and altitude sickness led to eight of them dying on the mountain.
This tragic story is an example of what economists call the “sunk-cost bias” which is where we continue to invest time, money, and effort into something after we know that the benefits may not be realised. This is the same as the phrase “throwing good money after bad”. For instance, a business invests in a new strategic direction, but then the market environment changes. Instead of adapting its approach, the business avoids the evidence and continues the same path. A personal example could be when you continue to watch a terrible film until the end because you’ve already sat through the first hour.