ZOMBIE PROJECTS: How Humility Saves Investments, Careers, and Marriages
Photo by Rowan Heuvel on Unsplash
Think about how often you keep things for years that you no longer need, that are broken, or that simply do not suit you. This is not stinginess or mindless hoarding — there is something more serious at work. Throwing something away or selling it for next to nothing means admitting that buying it was a mistake: the money and effort were wasted. But does this happen only with material things? The disposition effect is the psychological tendency to hold on to losing assets for far too long. Or, conversely, to sell profitable ones too early. Your business and investments, career and personal relationships, economic and geopolitical strategies can all easily become trapped by the psychology of sunk costs. Why do we so often find ourselves stuck in “zombie projects” that seem impossible to abandon, even though we should have walked away long ago?
THE SUNK COST TRAP
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n the corporate world, the disposition effect often leads to irrational resource allocation and missed opportunities. One example is the persistence of “zombie projects” — clearly unprofitable ventures into which executives continue pouring money because they do not want to admit to shareholders or investors that the original strategy was a mistake. Management teams develop what is known as “sunk investment syndrome”. In 2014, Jeff Bezos personally oversaw the launch of the Fire Phone smartphone. The device entered the market at an inflated price and with features that failed to interest consumers. Sales were a complete disaster. Yet Amazon continued spending millions on marketing and production, hoping discounts would turn the situation around. The project was finally shut down in 2015, and the company officially wrote off $170 million in losses from unsold inventory.
Time and money continue to be spent on a product simply because “so much has already been invested” in it, instead of shifting resources to a more promising market. The disposition effect can also manifest itself when companies sell or shut down fast-growing divisions too early in order to lock in short-term gains. In 2002, the creators of PayPal, including Elon Musk and Peter Thiel, sold the rapidly growing payment system to the giant eBay for $1.5 billion. At the time, it seemed like cashing in on an extraordinary success. However, eBay failed to fully realize the platform’s potential, while PayPal eventually grew into an independent giant valued at more than $60 billion. By “taking profits” early, its founders forfeited the possibility of earning many times more.
THE “SACRED LUCK” TRAP
At the state level, the disposition effect scales up to encompass entire countries and can persist for decades. Governments may spend years financing inefficient economic and social programs or loss-making state-owned enterprises in order to preserve jobs and avoid acknowledging a systemic crisis. From the 1960s onward, hard coal mining in Germany’s Ruhr region became economically unviable — imported coal was significantly cheaper. Instead of rapidly closing the mines and retraining workers, the West German government spent decades providing billions in subsidies to keep the industry alive, seeking to avoid a political crisis and having to acknowledge the collapse of the coal industry. The hope was that somehow, miraculously, everything would gradually sort itself out… The last unprofitable mine, Prosper-Haniel, was not closed until 2018, after more than €100 billion had been spent on subsidies over the years. Admitting failure means suffering enormous reputational losses.
In the 1970s, the tiny Pacific island of Nauru had the world’s second-highest GDP per capita thanks to phosphate mining. Knowing that the resource would eventually run out, the Nauruan government created a sovereign wealth fund. The country’s president was perceived by citizens as a sacred leader whose magic guaranteed eternal prosperity without the need to work. By the 1990s, the fund’s investments had begun to fail. For the leadership, admitting this would have meant destroying the myth of Nauru’s “sacred luck”. To prove to the population that the magic still worked, the government poured millions of dollars into a bizarre idea proposed by its Australian financial adviser — sponsoring a large-scale London musical called Leonardo. The musical was a spectacular failure: critics savaged the show, and it closed after only a few weeks. In an attempt to conceal the humiliation and preserve their status as “geniuses”, the fund continued making risky investments until it went completely bankrupt. Within just a few years, the island of Nauru went from a wealthy paradise to one of the poorest countries in the world.
THE “BLOOD AND HONOR” TRAP
In 1628, King Gustavus Adolphus of Sweden ordered the construction of the most powerful wooden warship in the world. During construction, shipbuilder Henrik Hybertsson died, and his inexperienced assistants discovered a critical problem: the ship was too narrow and too tall, and its center of gravity was dangerously high. During a stability test conducted in front of Admiral Fleming, the ship nearly capsized when 30 sailors ran from one side of the deck to the other. But telling the king, who was away fighting a war in Poland, that his cherished project was defective would have meant disgracing themselves and dishonoring the monarch as well. The king’s entourage chose to remain silent, hoping everything would somehow work out. On August 10, 1628, the super-ship Vasa ceremoniously set sail, traveled just 1,300 meters, heeled over in a light gust of wind, took on water through its open gunports, and sank almost instantly before the eyes of an astonished crowd.
For the same reason — clinging to the illusory hope that the trend will reverse — states continue fighting exhausting wars because immediate withdrawal would amount to an official admission of defeat. In war, the psychological mechanism of sunk costs reaches its absolute extreme. Once the first blood has been shed, the egos of rulers and societies rigidly block any possibility of compromise. The logic becomes monstrous: “If we stop now and admit that our war plan has failed, does that mean our soldiers died for nothing? No, we must fight until the bitter end!” As a result, in order to “justify” the deaths of the first thousand people, another hundred thousand are thrown into the furnace of war. The Vietnam War is a classic example of the disposition effect. By the late 1960s, it was already clear to the US leadership that the military campaign had reached a dead end and that victory was unattainable. Yet the administrations of President Johnson and then Nixon continued sending troops and spending billions of dollars. One of the central arguments was that “the deaths of thousands of American soldiers must not have been in vain”. The cost of the disposition effect in war is the most terrible of all, given the absolute irreversibility of the losses. If an investor loses capital because of the disposition effect, that capital can be earned again. If a politician loses an election, they can return in another electoral cycle. But a person killed in war cannot be brought back. This is the ultimate “realization of a loss”, where the price of a mistake is a human life.
THE “GOLDEN HANDCUFFS” TRAP
In everyday life, this effect also influences our decisions. People remain in toxic relationships, or relationships that have long since run their course, for years. An unhappy marriage or destructive friendship is justified with arguments such as, “But we’ve already been together for 15 years!” Mutual alienation and a profound crisis in the relationship between Prince Charles and Princess Diana began almost immediately after their wedding. Both spouses knew for years that the marriage was doomed and effectively lived separate lives. Yet because of the enormous pressure of the royal institution, the fear of publicly acknowledging the collapse of the “fairy tale”, and the reputational damage it would cause the monarchy, their divorce was not officially finalized until after 15 years of shared suffering in a royal “golden cage”. Psychologically, parting with anything is equivalent to admitting that years have been wasted. A person may remain in an unloved job with no prospects simply because they spent five years at university studying for that particular profession. Changing careers is perceived as erasing all the effort invested in the past.
Silicon Valley is well acquainted with the phenomenon of “golden handcuffs”: hundreds of engineers and managers at major IT companies such as Google and Meta burn out after just two or three years. They hate their monotonous corporate jobs but remain in their positions for years because of accumulated stock options and high salaries. Subconsciously, they perceive leaving the company as “erasing” all the effort they invested in grueling job interviews and years of education, and so they continue holding on to an emotionally “loss-making asset”. To avoid such traps, psychologists and philosophers advise separating the concepts of “me” and “my actions”, which our ego invariably fuses together. A healthy perspective looks like this: “My project failed, but I did not. I am still the same person — neither worse nor better. I had a bad plan based on incorrect data, but I can develop another one!” It all seems clear and simple, doesn’t it? Yet, strangely enough, this simplicity sometimes demands something almost impossible of us — what the Christian tradition calls humility.
CHRISTIAN HUMILITY AND THE DISPOSITION EFFECT
When Saint Anthony the Great was asked about the exceptional importance of strict fasting and bodily abstinence, he reminded people that these practices alone could not make a person holy. After all, the devil does the same — he neither eats, drinks, nor sleeps, and has an excellent understanding of Scripture, theological subtleties, and every kind of human wisdom. Yet none of this makes him any less the devil. He can imitate any good deed, any feat of human spiritual discipline, except one — he is fundamentally incapable of humility. In one of the ancient collections of the Desert Fathers’ sayings, the devil himself admits this single “shortcoming” in a dialogue with Macarius the Great. In every other respect, he is perfect, having originally been created as a perfect angelic being. Thus, if the devil were to show humility, he would cease to be the devil. Likewise, by practicing humility, a person draws closer to God and moves beyond the influence of His adversary. Paradoxically, this corresponds to the disposition effect. Humility in the earthly, psychological sense is precisely the ability to say: “I was wrong. My strategy was flawed. I accept the loss and move on”.
What drives a person to hold on to a “loss-making asset” until the bitter end — clinging to the conviction that they are right and refusing to admit a mistake? Christianity answered this question with a single word: pride. The modern era has offered a different language to describe this diabolical delusion — through ego structures, defense mechanisms, and cognitive distortions. For example, the concept of “ego inflation” in Jungian analytical psychology refers to a state in which a person’s ego identifies itself with archetypal forces or absolute righteousness, losing touch with the unconscious and reality. Existentialist philosophy calls this state bad faith — a form of self-deception in which a person flees from their own finitude and dependence on the world. Cognitive science speaks of “cognitive rigidity” — a complete resistance to new information, an inability to reflect and reconsider one’s beliefs. Pride may be called by different names, but it is always as fragile as glass because it rests on the fear of losing face, appearing weak, making a mistake, or being “like everyone else”. True strength is always flexible and open to dialogue. Weakness and fear, on the other hand, are often compensated for by erecting an impenetrable wall between the self and reality. This is how a person becomes trapped in the “ego trap”.
IT’S JUST EASIER FOR THE BRAIN THIS WAY…
Why do we cling to “broken” aspects of our lives for years? Neuroscientists believe our brains are to blame. The brain is designed to protect us from pain here and now, even at the cost of catastrophe in the future. What happens when we quit a job, get divorced, or sell stocks at a loss? Brain scans show that when a person realizes a loss, the amygdala and insular cortex become activated — the same regions involved in actual physical pain. For the brain, admitting a mistake is literally equivalent to physical injury. Nobel Prize winners Daniel Kahneman and Amos Tversky demonstrated that the pain of losing affects us approximately twice as strongly as the pleasure of an equivalent gain. Losing $100 provokes far more emotion than finding the same amount. That is why people are willing to continue a senseless war or hold on to falling stocks, hoping they might still avoid the loss. Instead of looking ahead to future prospects, we look backward at the “sacrifices” we have already made. The more time, money, or emotion we invest in something, the harder it becomes to escape the “sunk cost trap”. The brain feeds itself tiny doses of dopamine from the illusion: “What if everything changes tomorrow?”
A hopeless business project or a dead-end marriage continues because, at the biochemical level, the brain signals: “This is normal, this is right!” Admitting failure, however, causes dopamine levels to plummet instantly. The brain accounts for 2% of body weight but consumes 20% of the body’s energy. Rethinking a life strategy, finding a new job, or choosing a new partner requires enormous energy expenditure to build new neural connections. Therefore, to avoid a sudden biochemical shock, the brain activates mechanisms of “reality distortion.” You are surely familiar with these forms of defensive rationalization: “This isn’t a failure, just temporary difficulties,” “At least I gained experience”, or “Life is testing our resilience”. Existentialist philosophers recognized in such attitudes an escape from freedom and responsibility. And our brain becomes an accomplice in that escape. Yes, a ruined career or an unhappy marriage may be hell, but it is a familiar and predictable hell! It is easier to remain a victim of circumstances than to condemn oneself to uncertainty and an identity crisis. We define ourselves through our roles: “I am a successful investor”, “I am a faithful husband”, “I am a minister of a great power”. Admitting that a stock has become worthless, a marriage is dead, or a political strategy has led to war means accepting that a part of one’s former identity has died. People cling to the wreckage of the past because they fear that without it, they are nobody.
THE HUMILITY OF GREAT INVESTORS
Perhaps you think humility is something irrational and incompatible with real life, with a career, success, or financial results? In that case, as Jim Collins convincingly demonstrated in his iconic book Good to Great, you are mistaken. He conducted an extensive five-year study of companies that had made extraordinary leaps forward and sustained outstanding results for years. Collins discovered that all these companies were led by a particular type of individual, whom he called “Level 5 Leaders”. Their defining characteristic was a paradoxical combination of profound personal humility and unwavering professional will. Does this mean that business geniuses closely resemble Christian saints in their personal qualities? They do not seek excessive publicity, behave modestly, do not put their egos on display, and care more about the company’s future than their own greatness. Among other things, Collins describes the “window and mirror” effect. When a company succeeds, humble leaders look out the window, attributing success to external factors — God, luck, or their team. But when failure strikes, they look in the mirror and say: “I am responsible for this. It was my mistake”. Yet only truly humble, and therefore great, business leaders act this way.
Ordinary executives, as a rule, are egocentric and do exactly the opposite. We are accustomed to viewing the market as an endless competitive struggle. But John Templeton, one of the greatest investors of the 20th century, regarded humility in the face of unpredictability as a fundamental condition for survival in the market. He believed that the market does not favor the proud and stated explicitly: “An arrogant approach to investing will eventually lead to disappointment, if not outright disaster”. The legendary duo of Charlie Munger and Warren Buffett at Berkshire Hathaway built their strategy around the concept of a “circle of competence”. Munger always emphasized that true intellectual humility means knowing precisely the limits of what you do not know. An investor without humility risks venturing into territory where disaster awaits. Ray Dalio, founder of the giant hedge fund Bridgewater, describes the concept of “radical open-mindedness”. Instead of asking, “How can I prove that I am right?” he always asks himself: “How do I know that I am right? What if I am wrong?” This is the pure psychology of realizing losses — the ability to admit a mistake in time. And finally, the entire philosophy of Nassim Taleb, author of the famous The Black Swan, is built on epistemic humility — recognizing that human beings are extraordinarily limited in their ability to predict the future. In other words, humility in business is the highest form of realism, and it has nothing to do with weakness.
A “VERY HUMBLE” AMERICA
Economic humility means not considering yourself “smarter” than the market. Ultimately, it means not considering yourself “smarter” than life, fate, or God. Examples of how this principle works can therefore be found in many different spheres. Few people remember that in the late 1990s, Steven Spielberg turned down the opportunity to direct the film adaptation of Harry Potter. A director of his stature could have taken on almost any project. Yet Spielberg demonstrated humility by honestly acknowledging that his “circle of competence” did not align with a British children’s fantasy tale. He stepped aside, leaving the director’s chair to Chris Columbus. Spielberg preserved his resources for projects in which he excelled, while the world gained a landmark film franchise. Elizabeth Gilbert, author of the bestseller Eat, Pray, Love, described in detail the collapse of her first marriage. Her family life appeared perfect: an expensive house, a career, and a loving husband. Fear of admitting that the years of her “perfect” life had been a mistake drove Elizabeth into severe depression. Her decision to leave became an act of profound humility in the face of truth. She accepted the loss of her home, money, and reputation as a model wife, realizing an existential loss. This liberated both her and her former husband. If we look more closely, we can see that humility is an important element of American economic and political culture.
At first glance, this sounds paradoxical, because American culture is generally considered to rest on individualism, pragmatism, and proactivity. But these qualities concern the first part of the “equation of success” — willpower. Much less emphasis is placed on its second component — humility — although it has played a crucial role in American history since the days of the Founding Fathers. In 1796, George Washington voluntarily declined to seek a third presidential term, even though society and the military idolized him following victory in the War of Independence. He could easily have become America’s ruler for life. Instead, Washington demonstrated extraordinary institutional humility by establishing a precedent: laws and state institutions are more important than any individual, even the greatest leader. In the 1920s, Prohibition and the 18th Amendment to the US Constitution, which banned alcohol, became a central ideological dogma among American politicians. But the law proved powerless against socioeconomic reality. Instead of making the nation healthier, the reform gave rise to monstrous corruption, organized crime, and a black market. For 13 years, politicians refused to admit their mistake, doubling budgets for police and prisons. President Franklin Roosevelt demonstrated humility: in 1933, the state officially acknowledged the reform’s complete failure, and the 21st Amendment repealed Prohibition.
HUMILITY IN THE ANIMAL KINGDOM
Modern society often regards humility and the right to make mistakes as the preserve of outsiders. This is one of the fundamental differences between modern society and traditional societies, and even more so between modern society and the natural world. In those settings, “cutting losses” works far better and more consistently than it does among modern humans. The reason is simple: they have no “inflated ego” in our understanding of the term, and reality always matters more to them than any concept. Biology and traditional culture have developed rituals and instincts that are sometimes quite brutal but remarkably effective, allowing the dead to be “cut away” instantly to save the living. In ancient cultures, the realization of a loss was almost always formalized through sacrificial rituals or institutions of resetting obligations. This allowed a tribal leader to acknowledge the failure of a strategy without losing face. Consider, for example, the Jubilee Year among the ancient Israelites. Because of poor harvests or mistakes, people often fell into debt, lost their land, and were enslaved. At a certain point, the economy as a system would “break down”.
But the Israelites found a way out of this dead end: every 50 years, a Jubilee Year was proclaimed, during which all debts were forgiven and sold land was returned to its original owners. This was a compulsory, sacred realization of losses for creditors and a reset for debtors. At the same time, the creditors’ egos remained intact, because this was God’s law, not a consequence of their personal failure or weakness! The potlatch ceremony among Indigenous peoples of North America performed roughly the same function of ritualized loss realization. To demonstrate his high status, a chief had to humbly give away, burn, or sink his wealth, clearing the social space and restarting economic relationships. Could it be that this very “cult of humility” explains why we know nothing about grassroots social protests or revolutions among either North American Indigenous peoples or the ancient Israelites?
ACCEPTING DEATH AS PART OF LIFE
Humility is far more natural than pride because its origins lie in biology rather than culturally conditioned social psychology. There are no cognitive distortions in the wild. An animal cuts its losses instinctively, without thinking. A cheetah would never think: “I’ve already spent three hours on this hunt, so I’ll chase the antelope for another five hours just to prove to another cheetah that I was right”. In some cases, nature has devised nothing more humble and, at the same time, more rational than “self-mutilation”! A lizard leaves its tail in a predator’s jaws to save the rest of its body. A crayfish breaks off its own claw to escape a trap. A wolf gnaws off its paw to free itself from a snare. But the most astonishing phenomenon of all is the Bruce effect. In 1959, zoologist Hilda Bruce described a phenomenon observed in many mammalian species: when a more promising male appears, a pregnant female immediately corrects her “mistake” — blocking the pregnancy and inducing a miscarriage herself.
Plants are less brutal than animals but no less remarkable at cutting their losses. In autumn, as daylight hours shorten, maintaining leaves requires more energy than photosynthesis can produce. A tree humbly sheds its “loss-making assets” to survive the winter — it cuts off the supply of nutrients to its leaves, which die and fall away. In nature and traditional culture, the ability to humbly endure a “small death” is a law of survival. And only modern humans, imprisoned within the cage of their own egos, are prepared to destroy their businesses, health, personal happiness, or even their countries rather than admit that their previous bet did not pay off. Death, aging, crisis, and chaos have come to be perceived as “technical malfunctions” that must not be humbly accepted as part of life but defeated, hacked, and eliminated through technology. And how acceptable and natural does humility seem to you personally as a strategy for living? Have you ever managed to find a way out of a zombie project?
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