The sunk cost fallacy describes a cognitive and social pattern in which individuals or groups persist with a course of action because of prior investments of time, money, identity, or reputation, even when accumulating evidence demonstrates that the course is flawed, harmful, or unsustainable. Rather than recalibrating decisions based on present realities and future consequences, actors experience pressure to justify past commitments, producing escalation of commitment, defensive rationalisation, and moralised persistence. This phenomenon is well established in behavioural economics and social psychology, particularly in contexts where public identity, moral self-concept, and reputational standing are at stake (Arkes & Blumer, 1985; Staw, 1976; Brockner, 1992).
Crucially, sunk cost dynamics intensify when investments are not merely financial but existential. In identity-based movements, activist ecosystems, and cause-driven organisations, sunk costs become entangled with who people believe themselves to be, how they are seen by others, and the moral narratives through which they interpret their actions. Under these conditions, withdrawal is not experienced as correction or learning, but as humiliation, betrayal, or self-annihilation. The fallacy therefore shifts from an individual cognitive error into a collective structural trap, sustained by group norms, social reinforcement, and institutional incentives.
In the case of the non-Aboriginal GuriNgai group, the sunk cost fallacy operates most powerfully at the level of identity investment. Over an extended period, members have publicly asserted a fabricated Aboriginal identity and embedded that claim across personal biographies, community roles, ceremonies, educational activities, cultural performances, and relationships with institutions. These assertions have been repeatedly challenged by genealogical, linguistic, and historical evidence demonstrating that “GuriNgai” in Northern Sydney and the Central Coast has no legitimate Aboriginal basis. At this stage, abandonment of the claim would require not only acknowledging error, but confronting the possibility of having misled others and oneself over many years. The psychological and reputational cost of withdrawal has therefore come to exceed, in the minds of participants, the perceived benefits of truth correction.
Classic sunk cost research predicts precisely this pattern. When individuals are publicly committed, personally responsible, and emotionally invested, disconfirming evidence tends to trigger escalation rather than retreat (Arkes & Ayton, 1999; Staw, 1976). In this context, critique is reframed as persecution, counter-evidence is treated as hostile or politically motivated, and increased performative signalling of authenticity emerges as a defence mechanism. The group’s persistence is thus not evidence of the claim’s strength, but of the depth of prior investment that now makes disengagement psychologically intolerable.
For the Campfire Collective, the sunk cost fallacy manifests in organisational rather than purely personal form. The organisation has invested branding, fundraising narratives, governance structures, public messaging, and moral legitimacy into associations with contested cultural authority and self-appointed custodianship. These investments are not easily reversible. Acknowledging that the foundational assumptions underpinning these associations are unsound would threaten donor confidence, undermine regulatory standing, destabilise volunteer commitment, and fracture the organisation’s self-image as a benevolent, community-serving actor.
Organisational research shows that founder-centric or ideologically driven entities are particularly prone to escalation of commitment because retreat is interpreted as existential failure rather than responsible governance (Staw, 1981; Bazerman & Moore, 2013). Warning signs such as community opposition, documented inaccuracies, and governance concerns are therefore more likely to be reframed as misunderstandings or attacks than treated as signals for independent review or reform. Structural sunk costs, including reputational capital, institutional relationships, and donor narratives, lock the organisation into continued defence of its prior positioning, even as the risk profile increases.
A closely related mechanism applies to Coast Environmental Alliance, where sunk costs are tied to activist identity and narrative coherence. The group has invested years of campaigning, social capital, and public messaging into alliances with the non-Aboriginal GuriNgai and associated cultural claims, positioning itself as a defender of Country and community against external threats. Over time, this narrative has become central to the movement’s sense of purpose and moral legitimacy.
As evidence mounts that these cultural claims are invalid and harmful to recognised Aboriginal governance, disengagement would require a painful re-authoring of the movement’s story. It would imply that years of struggle, sacrifice, and mobilisation were misdirected. Research on ideological escalation demonstrates that movements in this position often persist with ineffective or harmful strategies because abandoning them would invalidate the meaning of past struggle and undermine collective identity (Brockner, 1992; Kahan, 2017). Consequently, critique is personalised, institutions are cast as corrupt, and opposition is framed through conspiratorial or moralised lenses. Escalation becomes a performance of sincerity rather than a pathway to effective or ethical outcomes.
Across all three cases, the sunk cost fallacy is reinforced by group dynamics and social identity processes. Public commitment creates audience costs, making reversal more embarrassing the longer persistence continues. Internal dissent is suppressed to preserve cohesion, while external critique is reinterpreted as evidence that persistence is morally necessary. What begins as a cognitive bias thus becomes an interlocking system of identity protection, reputational defence, and narrative maintenance.
The cumulative effect is not merely the persistence of error, but the active production of misinformation and conflict in service of defending prior investments. As escalation continues, the capacity for self-correction diminishes, exit costs rise, and harm to Aboriginal communities and the broader public record intensifies. From a governance and safeguarding perspective, this pattern is especially concerning because it transforms what could have been a correctable mistake into a durable architecture of denial, rationalisation, and institutional complicity.
Understanding the role of the sunk cost fallacy in these dynamics is therefore essential, not as a rhetorical accusation, but as an explanatory framework. It clarifies why evidence alone often fails to produce change, why persistence hardens in the face of refutation, and why meaningful resolution requires not just factual correction but the creation of credible off-ramps that lower the psychological, reputational, and organisational costs of disengagement.
A Long Con, Gone on Too Long. 
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