The Sunk Cost Fallacy sucks

I was reading about the Sunk Cost Fallacy recently. I’ve heard of it before but misplaced it in my mind. And now I am reminded how much it sucks… because of the times I have done it, it rather sucked a whole lot. Maybe many of us do this and also remember how much it sucked.

This sums it up here:

“The sunk cost effect is the general tendency for people to continue an endeavor, or continue consuming or pursuing an option, if they’ve invested time or money or some resource in it,” says Christopher Olivola, an assistant professor of marketing at Carnegie Mellon’s Tepper School of Business and the author of a 2018 paper on the topic published in the journal Psychological Science. “That effect becomes a fallacy if it’s pushing you to do things that are making you unhappy or worse off.”

This idea often applies to money, but invested time, energy or pain can also influence behavior. “Romantic relationships are a classic one,” Olivola says. “The longer you’ve been together, the harder it is to break up.”

Time

It is at its worst when we have spent a whole lot of time and energy on something

“This investment becomes a reason to carry on, even if we are dealing with a lost cause. The more we invest, the greater the sunk costs are, the greater the urge to continue becomes.”

(The Art of Thinking Clearly P13)

It is just that when you spend so much time, effort, pain, energy, blood, spirit, soul… bloody lifeforce into something, even when it isn’t paying off in whatever way, even if it seems pretty damn toxic… you want to keep going until somehow it turns out to some gain and becomes WORTH it. Worth all that damn effort, sweat, blood, and tears.

This is when I have a problem with it. Not as much when it is in its minor version but a massive problem when I have spent a great deal of energy and time on something… such that, yeah, I just will have this insane urge to pursue it more even if it is insane to do so.

When it comes to money and investments my brain definitely does not work this way. I definitely have a brain for finances. When it comes to effort and time though… yeah, that gets me. Like working in a toxic work environment, when I have chronic pain and knowing it is insanely unhealthy but because I spent all that time and effort on my career just not willing to stop or pursue something different.. so I kept pushing through. And that did not work out well at all.

But there is this idea that I spend all this time and energy on something that it would be all for Nothing or Worthless if I walk away from it. That I need some Gain to make it all worthwhile. But damn, that is faulty thinking there.

Just let it go, man

But when you Think about it, it doesn’t make any sense. It is obviously not working for whatever reason. And to continue to go at it means you are sticking with something that could be quite bad to horrible for Years. When you Know it is already bad. I mean, logically, let it Go already. Move on. All that effort is gone. All that time is gone. All that money or effort or whatever you put in… is gone. Do we really want to put More in? It just seems stupid. Whether it is money you have sunk in, or time, or effort, it doesn’t matter. Whether it is an investment, work or a relationship… all the same concept.

But my brain is like, hell yeah, I do want to put more time in… because maybe if I do it twice as hard and put in twice as much I will get a Different result. It will become WORTH it. And as it turns out, it is twice as bad, actually (in my work example). But usually in any example, the past predicts the future pretty damn good- if I have sunk a time, money, effort into a lost cause it doesn’t spontaneously become a winner.

“What’s done is done,” Olivola says. “There’s nothing you can do to regain money that’s lost — and pursuing something that makes you unhappy not only isn’t going to get your money back, but it’s also going to make you worse off. You’re just digging a deeper hole.”

Time

Our brains seem to think we can somehow turn it all around. It just doesn’t quite work that way. Most of the time. It is worse if it Did work that way even One time because then we have that one damn time it did work that way we can remember to use as an example why we should keep trying that behaviour. We should know when to cut our losses and run. But we just don’t quite know that when this strategy kicks in. To think of the time where I wasted so much time and caused myself so much harm with this sunk cost fallacy, man, it Sucks.

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