We Shouldn’t Fall Into the Sunk-Costs Trap in Iraq

TAL AFAR, MOSUL, IRAQ - JUNE 16: Many Tal Afar residents, ethnic minority Shiite Turkmen, fled towards Sinjar, a town in northwestern Iraq, due to the ongoing clashes around Mosul, Iraq, June 16, 2014. Militants led by the group Islamic State of Iraq and the Levant, ISIL, took complete control of northwestern Iraqi district Tal Afar on Monday, 16 June, according to a security sources. (Photo by Emrah Yorulmaz/Anadolu Agency/Getty mages)
Photo: Emrah Yorulmaz/Anadolu Agency/Getty Images

Watching the radical jihadist group ISIS roll across a sizable chunk of Iraq, seizing strategically important cities with breathtaking ease and forcing the mass migration of Iraqi citizens, has been difficult. Until recently, after all, the U.S. had been in Iraq in part to prevent exactly this sort of thing from happening. As one veteran told the New York Times, “Part of me wants to say that everything we did or attempted to do is being torn asunder, that it is all for naught.”

There seems to be a strong temptation in some circles to find some way to help the Iraqi government fight back against ISIS, and some of these arguments are focusing on the almost unfathomable costs of the war so far. “The monetary cost is in the trillions of dollars,” wrote Fox News commentator Cal Thomas. “Are we now saying, ‘Never mind’?” Roger Cohen of the Times wrote that not intervening “would be a betrayal of the thousands of American lives lost since 2001.” And in an editorial calling for U.S. involvement, the Washington Post bemoaned the fact that “some in the United States are ready to write off what’s left of the country in whose liberation and democratization Americans have invested so heavily.”

It’s understandable that some people are arguing that, given the tremendous cost of the war so far, the only moral or sensible option is to assist the Iraqis. But it’s also exactly the wrong response, a particularly difficult example of a harmful flaw in human decision-making called the sunk-cost bias.

As psychology researchers Hal R. Arkes and Catherine Blumer wrote in a 1985 paper explaining the phenomenon, the sunk-cost bias consists of “a greater tendency to continue an endeavor once an investment in money, effort, or time has been made. The prior investment, which is motivating the present decision to continue, does so despite the fact that it objectively should not influence the decision.”

Objectively is a strong word, but it’s the key point here: Sunk costs are sunk. You cannot get them back whatever you do, and therefore they are “irrelevant to current decisions,” as the researchers put it. The sunk-cost bias is probably used most frequently to explain the financial phenomenon of “throwing good money after bad” — that is, failing to cut one’s losses at the appropriate time because it’s too painful to admit that the money is gone, and there’s evidence that part of the reason we fail to pull our money out of a poor investment (or that we sit through a movie that’s clearly horrible halfway through, or finish a book that left a bad taste in our mouth from the start), is the cognitive strain of admitting that something was a wasteful use of our resources. It’s easier, in a sense, to just keep plowing ahead.

Beyond bringing irrelevant considerations to the table, focusing on sunk costs worsens our decision-making in other ways. For instance, the researchers cite evidence that “those who had incurred a sunk cost inflated their estimate of how likely a project was to succeed compared to the estimates of the same project by those who had not incurred a sunk cost.” Having skin in the game, in other words, makes it harder for us to honestly and accurately evaluate the likelihood of a given project succeeding — it blinds us a bit because we’re so freaked out by the prospect of having squandered resources.

Money’s one thing, but referring to killed Americans as a “sunk cost” feels disrespectful. They were people, after all — people whose deaths left behind devastated friends and relatives. But it’s exactly in the most emotionally wrenching instances when our decision-making biases are most likely to affect us, and that’s why it’s important to be aware of them. In this case, looking forward and backward at the same time makes it all too easy to muddle our decision-making, to mix up what are relevant concerns — that is, the costs and benefits of further engagement in Iraq — with what, as cold-blooded as it sounds, aren’t.

So while there may or may not be good reasons for further U.S. action in Iraq — that’s for foreign-policy experts, not social scientists to decide — focusing on what has already been lost is not one of them.

Julia Reinstein contributed research.

Sunk Costs Shouldn’t Drive the Iraq Debate