New Delhi, Oct. 4 -- The IPL mega auction offers more than expensive player deals. It also reveals how emotions can overpower planning. Franchise owners face psychological traps similar to those affecting stock market investors.

Consider a team that values a star player at Rs.12 crore. A rival pushes the bidding to Rs.13 crore. The first team remembers hours of preparation and other players it missed. Walking away now feels like wasting that effort. It raises its bid to Rs.15 crore, abandoning its original limit.

This is the sunk cost fallacy. People let past spending or effort influence decisions that need fresh judgment. An investor might similarly hold a falling stock because it has already lost 30%. Instead of examining its current ...