Which bias occurs when one increases investment in failing courses of action, rather than cutting losses?

The concept of escalation of commitment refers to the tendency of individuals or organizations to continue investing in a decision or project despite evidence that it is failing. This bias often leads to throwing good money after bad, where prior investments create a psychological commitment that makes it difficult to abandon the course of action. As a result, individuals may ignore negative feedback and continue to allocate resources, hoping that circumstances will improve simply because they have invested so much already.

This behavior is often driven by a desire to avoid loss and the fear of admitting that a decision was wrong. In contexts where significant time, effort, or resources have been invested, the stakes can feel higher, pushing individuals to persist even when clear indicators suggest that cutting losses would be a more rational choice. Thus, escalation of commitment encapsulates the cognitive bias that keeps people engaged in failing strategies instead of reassessing and pivoting towards more viable alternatives.