Quote Originally Posted by BaronOfHell View Post
The Red Cloak suffers from sunk cost fallacy, meaning it cannot disregard previously invested resources when taking future actions into consideration.

In the case of the goblin puppet master, it means anything that is not the plan, is not an option.. at least not if it goes against the plan. I suppose mentally, his conscience just wouldn't be able to bear it.

I believe the story truly does portray a fallacy, because there seems to have been many better options RC could have chosen than to follow the plan.
Like... until the secret mercenaries of Shojo (no not the boys in blue, except one of those did so too) began blowing up Gates like there is no tomorrow, RC's time did seem pretty unlimited. Xykon didn't have to be the be all end all, but I suppose now he can't ditch the lich anymore, or he might as well give up his life and the plan altogether.

Anyway what I wonder is if sunk cost doesn't have a value if you do have limited time? A scenario where you invest resources for some gain, and based on what you get, you make your next decision. The alternative of ignoring whatever you got seems unlikely to be better?

Here is an example. In a game of chess you have 2.5 hours to finish a game, so does your opponent, so in total of 5 hours. The game may be 50 moves long, that means each player makes 50 moves for a total of 100 moves... 5 hours for a 100 moves may sound like a lot, but you actually only have 3 minutes per move in average.
With sound time investment, a large part of the moves does not require 3 minutes, but even if we eliminate half the moves it still leaves out 6 minutes per move.
Now I won't go into chess terminology, but imagine you have a position that requires you to think a lot.. So far you have invested your time well, so you can afford at least 30 minutes to consider your options, but then you get absorbed in a specific line of moves for the majority of the duration and now you really cannot spend any more time considering the position. Yet all you have for the time spend is a very deep understanding of one move and the variations which follows, and a very shallow understanding of perhaps two other moves.
You have realized that the move you spend the most time on will give you a position from which you have to fight for a draw if your opponent plays correctly, and you also know there are many ways your opponent can go wrong (perhaps the very reason you were lured to spend so much time on this particular move). However, presently, you see nothing wrong with one of the other moves you considered, and the third you decided to disregard completely, as it doesn't seem to be any good. Also you just discovered a fourth move that you haven't really looked at, but at first glance it does look like a forced win for you, or close to at least.

So what do you do? Please have in mind all moves are supposed to be very complicated, so you cannot be very confident in any other move than the one move you don't think is very good if your opponent plays well against it.

In my opinion the resources spend, is what should determine the outcome. In the chess example, if you know little to almost nothing of other candidate moves than the one you spend so much time on, isn't it a much larger risk to go for any other move then?
Sometimes people play dubious openings in chess knowing they can be punished, but have so much preparation in hand, that it is unlikely to happen based on their current opponent. If this is a valid strategy, is it not also better to go for where your resources went, than to invest in avenues you haven't explored properly, even though at first sight they look so much more promising?
The problem here is that the fallacy is based on a grain of truth, but with a potentially untrue assumptions.
The potentially wrong assumptions are that all other options have upfront costs higher than the still remaining costs and that none of the previously made investments can be reused.
If the assumptions are true switching options always requires around as much as you already invested plus the stream costs making every option that isn't "the plan" needlessly expensive.
Our example chess player can't reuse a lot of his previous thought process, because it contained a lot of forward thinking on this one specific move.