The Liberal Democrats and the Fallacy of Sunk Costs

John McTernan makes the case:

Paradoxically, it is the increaing unpopularity of the Liberal Democrats that will bind them closer to the Tories. It’s illogical, I know. Being in the Coalition has halved their support, so really they should leave as soon as possible. But they won’t, they’ll cling on for dear life. Economists know this as the “sunk cost fallacy” – ordinary people use the phrase “good money after bad”. Essentially, most of us have an aversion to loss, so we tell ourselves any stories we can think of rather than do the logical thing and cut our losses. For sure, some Lib Dems think that there will be an upside. But the shrewd ones realise that just as their ministers are being made to take the pain now, Cameron and Osborne have no intention of sharing any gain. Yet they’re already trapped, taking damage and hoping that this is the worst.

No-one who had a choice would build a political strategy on the saccharine slogan “the darkest hour is just before dawn”.