A venture capitalist argues: 'We have already invested ten million euros in this mining concession; we must invest another five million or that investment is wasted.' Which fallacy is evident?
Answer and explanation
Correct answer: B. sunk cost fallacy
- Step 1: The investor makes capital allocation decisions based on past unrecoverable money spent rather than future commercial prospects. Throwing good money after bad to justify historical expenditures is the sunk cost fallacy. Answer: sunk cost fallacy. Why not the others: "slippery slope sequence" posits a chain reaction of catastrophic consequences stemming from an initial choice; "begging the question" assumes the conclusion in the foundational premise of the argument itself; "appeal to false authority" cites an unqualified or irrelevant figure to validate a factual assertion.
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