Cutting Your Losses: How to Avoid the Sunk Cost Trap

Document Type



Published by the Richard Ivey School of Business Foundation in Ivey Business Journal, volume 73 issue 6, 2009. Bryant users may access this article here.

Publication Source

Ivey Business Journal


The article presents the author's comments on why leaders have difficulty cutting their losses, and how this mistake can be extremely costly, particularly in a volatile environment. He states that persistence can be a valuable leadership quality, perhaps even more so in a volatile environment. The author discusses strategies including the launch of a pre-emptive conversation, creation of constructive tension, and defining opportunity costs.