The Sunk-Cost Fallacy · Brojo: Confidence & Integrity

The Sunk-Cost Fallacy

This is an interesting psychological phenomenon I stumbled upon years ago, when studying psychology for the first time. It is essentially the idea that, because we’ve already invested in something, we have to keep investing in it / go through with it.

My psychology prof used the example of a bad movie at a movie theatre. It might be terrible, and obviously terrible from the start, but most people tend to think along the lines of, “Well, I’ve paid twenty bux for this, so I gotta stick it out until the end.”

Newsflash: YOU ACTUALLY DON’T HAVE TO!!

Instead, think of it as money lost regardless of what you do next, and don’t lose time on it as well. It’s OKAY to walk out of the theater and put the remaining 90 minutes you would otherwise waste there into something more worthwhile!

The sunk-cost fallacy can affect us in many areas of life, including relationships, careers, hobbies and more!

That first date going terribly? Find a way to end it early.

Hate working in the career your degree prepared you for? It’s likely not too late to switch career paths!

Decided you don’t want to read all those mystery novels you bought? Sell ‘em!

I mean, your time is finite, and arguably your most precious resource, so why waste it on unpleasant and/or useless tasks to justify some investment of time/money/effort you made in it prior?

You gotta be objective and let it go! I know it’s hard, but it’s better than doing something that leads nowhere good…

The investment is made. The time / money has been spent, and you cannot get it back.

However, you can learn from it, pivot, and do something better going forward.

Learn more about the sunk-cost fallacy here: The Sunk Cost Fallacy: How It Affects Your Decisions

One interesting quote from the above article:

“Studies have shown that the larger the loss, the higher the sunk-cost bias is. In other words, the more you have already ‘invested,’ the less likely you are to shift gears and walk away.”

In other words, the deeper you dive into the wrong rabbit hole, the tougher it is to dig yourself out! Thus, if you suspect you are going the wrong way, stop and reevaluate your path carefully, regardless of what you’ve already invested into it. Doing so might save you a lot of time and grief in the future!

And one great piece of advice from the same article:

“Most importantly, ask yourself, ‘Would I continue on this course if I hadn't already invested the resources?’ If the answer is no, it's a sign you should adjust your plans. Set clear goals and focus on the future instead of dwelling on past choices.”

I’m interested in reading about your experiences regarding the sunk-cost fallacy. Share some stories!

Are you struggling with it now in any way?

What would it take for you to let something go, knowing that it isn’t worth pursuing further?

Looking forward to your thoughts and stories!😁

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