Of course the flip side, meaning the benefits of the sunk-cost fallacy, need to be addressed. One example can be found in a January 12, 2007 article in the “Freakonomics” section of the New York Times titled “What does Barack Obama Know about Behavioral Economics?”
In the article, Obama is quoted as having said about sending more troops to Iraq as having used the notion of the fallacy. “And essentially the administration repeatedly has said: ‘We’re doubling down; we’re going to keep on going … because now we’ve got a lot in the pot and we can’t afford to lose what we put in the pot.”
In response to the article were some comments that reader’s blogged in, having to do with gambling. The first one stated, “Actually, you double down in blackjack when you have a favorable position, such as cards that total 10 or 11. Calculated risks like this and splitting cards is the only way to win at the game. Essentially, the strategy is to increase your bet when your odds of winning are at their highest and decrease or keep your bet low when the odds are lower Otherwise, like most casino games, the house has the advantage.”
The next commenter supported the point writing, “In poker, I think the term is being “pot-committed”. One would have invested so much in a single hand that to back out now would not benefit the overall position.”
The attempt to recover ones losses by further gambling is exemplified in a November 2004 write-up in the Harvard Weekly Addiction Gambling Education Report. The article, “Sunk Costs and Sinkerballs – An Analogy,” talks about the Boston Red Sox coming back after an extensive losing streak.
The situation is described in the article. “For most Red Sox fans, this is the pay-off they’ve waited for their entire lives. For others, who already have passed on, the moment came too late.” The idea expressed in the article called the gambler’s fallacy, or the belief that a series of losses must be followed by a win is thus breached upon—a direct correlation to the sunk-cost fallacy.