ABSTRACT
This chapter focuses on the loser’s fortune. It discusses two paradoxes. One is that awareness of defeat does not help the would-be loser cut down its costs; rather, it may actually contribute to them. This is the sunk-cost paradox. The second is the loser’s fortune paradox: losing a war can do a nation a lot of good. The chapter examines how an actor can accumulate tremendous losses not because it mistakenly thinks it can win, but because it correctly expects to lose. In its efforts to minimize the costs of defeat, it actually acts to maximize them. The key to the solution of the paradox of sunk costs lies in Maoz and Felsenthaps notion of self-binding commitment. To show a sunk-cost paradox in a historical context, several things must be established. First, one must demonstrate awareness by the ruling elite of the would-be loser that the war cannot be won and might be lost.
