Grit is having a bit of a moment. But really, the concept is only a repackaging of that old standby perseverance. Today it's Angela Duckworth touting the benefits of mental toughness. In the past it was probably your dad or grandma telling you 'Never give up!' but it pretty much amounts to the same thing.

Professionals have long been encouraged to persevere in the face of hardship. The problem? This advice is only half right. Grit is only good when you're on the right path to begin with, otherwise it's known as obstinacy.

In a fascinating post on his Undercover Economist blog author Tim Harford offers a deep dive into what we know about grit vs. obstinacy. The short answer is perseverance  is often totally irrational. Look at studies on everything from soccer betting and the behavior of British game show contestants to analyses of when people sell their homes and stocks, and the conclusion is the same -- we often fail to quit when we really, really should.

This is down to a tendency discovered by Nobel laureate Daniel Kahneman and his collaborators known as loss aversion. In simple language, people hate losing things they have way more than they mind not getting something in the first place. "It can lead us to cling on pig-headedly to bad decisions because we hate to stop playing when we're behind," explains Harford.

So how do you know when grit is good, versus when quitting is wiser? "The truth is that there are no foolproof methods for knowing when to hold 'em and when to fold 'em," Harford concedes, but he does offer a handful of useful guidelines to help you distinguish one type of situation from the other.

1. Ignore sunk costs.

It's really difficult to implement this one, but try as hard as you can not to think about how much time and money you've invested in a course of action when considering whether to continue with it. A failing proposition is a failing proposition whether you wasted one dollar or $10,000 on it. "Look resolutely away from sunk costs and towards future prospects," instructs Harford.

2. Persevere flexibility.

Sticking with a general principle or end end goal isn't the same thing as sticking rigidly with an exact step-by-step plan to get there. Harford offers this example: "Angela Duckworth's family follows a 'hard thing' rule: the children have to choose an activity, such as music or athletics, that requires dedication and practice. They're allowed to quit but only at a natural break point and only if they find an alternative 'hard thing'."

3. View decisions as experiments.

"Of course, one can end an experiment too early or doggedly persist too long," Harford allows. So what's the value in viewing your choices through this lens? "Experiments are always designed to teach us something. We can keep asking: what have I learnt? And am I still learning? If a new project or activity keeps teaching us new things, it is probably worth continuing--even if the lessons are sometimes painful."

Do you have any further ideas on how to determine "when to hold 'em and when to fold 'em?"