It can be hard to assess whether we’re getting trapped in a sunk cost situation because we’re in too deep. It’s like being a “fish in water.”
But denial is a huge indicator — despite seeing something not working out and persisting in the same direction, behavior, etc.
Another strong indicator is flat out refusing to admit we’re wrong. For example, someone presents some strong information that can steer us in the right direction and we instead double down. As a matter of fact, we might even go looking for information that supports out faulty positioning(confirmation bias).
Thanks for this question, I might write a whole article on this question alone. Lol.