Sunk
Cost Effect: Staying in the Game when you should Leave
The Sunk Cost Effect
is perhaps the nastiest thing about human nature that I can think of.
It is why people stay in cults. It is why people stay in bad
relationships. It is why people stay in
dead-end careers. It is why people cannot
“let go of the past.” It is why wars get
nasty beyond any human reasoning.
The greatest fear is the haunting question in
your mind, “So, I did all of that for nothing?”
So, you joined a cult. You shaved
your head, and wear strange clothing.
You alienate all of your family and friends by saying this cult is the
greatest thing in the world. You spent tons
of money supporting this cult. So, now
you have these feelings. You want to
leave. But, you would feel like a fool
if you did. All that money and time
would go down the drain. So, you
redouble your efforts and become more stubborn in your defense of the cult
because you have so much invested.
Or, you have been involved in war. You know 300 guys who have gotten
killed. You do not want them to have
died in vain, right? So, you keep the
war going in the remote chances of winning.
The United States was driven out of Iraq, and it is now under control of
a hostile regime. We spent 3 trillion
dollars on that war. We do not want to
have wasted all the lives of those men and all that money right? So, we will probably go back in and spend
another 10 trillion, get bankrupted, and kill perhaps just as many soldiers
again.
Now, you understand the idea of sunk costs
and how devastating its psychology can be on people, groups of people, and
entire nations.
Freddy Martini
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