Jimmy sells his catch at the local market. He knows that he can sell only fresh fish, so he throws the bad ones away, regardless of the time it takes him to find, catch, and clean the fish.
Jimmy knows that if he were to sell spoiled goods, his customers would not return.
So, instead of crying over stale fish, he considers them as sunk costs and sells what customers actually want. In his free time, Jimmy isn't that rational.
Unlike fish that don't go to the movies, Jimmy does. He buys himself a ticket for the afternoon show.
But it turns out that a few hours before the film starts, his friends want to meet up to play football, Jimmy's favorite sport.
Since he has already spent the money on the ticket, he declines the invitation.
According to sunk costs theory, he shouldn't have - the money he spent on the tickets is already gone, and he won't get it back by watching the movie.
What matters is that he has a good time. Jimmy falls for the so-called sunk cost fallacy, the strong natural fear of losing what we already own and the tendency of our brain to treasure all the things we possess.
A more famous example of the fallacy is the Concorde - the supersonic passenger plane.
Building the aircraft proved to be very difficult and expensive, but instead of shutting down the project, the British and French governments continued funding it even though they knew the aircraft would not have any economic benefit.
