when a business or investor spends more money trying to reverse past losses they risk succumbing to the sunk cost fallacy the expression don t send good money chasing after bad money is a caution against this type of mistake 
investopedia sydney saporitounderstanding sunk costsa sunk cost refers to money that has already been spent and cannot be recovered a manufacturing firm for example may have a number of sunk costs such as the cost of machinery equipment and the lease expense on the factory sunk costs are excluded from a sell or process further decision which is a concept that applies to products that can be sold as they are or can be processed further 