The antidote to sunk cost bias

Sunk cost bias causes otherwise smart people to make irrational decisions when investing resources, based on previous investments that can’t be recovered.

A simple example is choosing to go to an event because you already spent money on tickets, despite being sick and not wanting to go.  A longer term and more toxic example might be the desire to fix an awful, abusive relationship, or continuously endure a job you hate just because you have so many years “invested”.

The antidote to overcoming this bias is to ask yourself: What would my choice be if I had no previous investment, and was starting from where I am now, with what I know now?

 

 

Feel free to comment, reply, correct, or share your views

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s