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How the Sunk Cost Fallacy Makes You Act Stupid

How the Sunk Cost Fallacy Makes You Act Stupid

Do you think you make smart, rational decisions most of the time?

Chances are good that even if you pride yourself on being rational most of the time, you still occasionally fall for the sunk cost fallacy.

What is this fallacy?

In economics, a sunk cost is any past cost that has already been paid and cannot be recovered. For example, a business may have invested a million dollars into new hardware. This money is now gone and cannot be recovered, so it shouldn’t figure into the business’s decision making process.

Or, let’s say you buy tickets to a concert. On the day of the event, you catch a cold. Even though you are sick, you decide to go to the concert because otherwise “you would have wasted your money”.

Boom! You just fell for the sunk cost fallacy.

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Sure, you spent the money already. But you can’t get it back. If you aren’t going to have a good time at the concert, you only make your life worse by going.

How Often Do You Fall Into The Sunk Cost Fallacy Trap?

Unfortunately, an awful lot.

If you take a moment, you can probably think of all sorts of situations where you make irrational decisions because of the sunk cost fallacy.

To help you see how common this is, here are a few examples.

1. “I might as well keep eating because I already bought the food.”

I do this one all the time. If I go to a restaurant and become full after eating most but not all of my food, I feel compelled to eat the rest so that it isn’t “wasted”.

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But in reality, nobody else will eat that food after me. It’s not getting recycled or given to poor people. It’s just thrown out.

So if I feel uncomfortable, I shouldn’t eat the food. It’s a sunk cost, and I only lose by gorging myself further.

2. “I might as well keep watching this terrible movie because I’ve watched an hour of it already.”

Or reading a terrible book that you are 100 pages into, or continuing a T.V. series on Netflix that has gone downhill, etc.

It doesn’t matter that you’ve already invested time into whatever media you are consuming. If you don’t like the movie, you can walk out of it.

I once made the mistake of staying in the theater during Dinner For Schmucks despite quickly realizing how terrible it was. It never got better, and I wasted even more of my time by staying.

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3. “I might as well keep going to a bad/useless class that I paid for.”

If you join a club or take a class to learn a new skill, you might feel compelled to continue even if you don’t enjoy it.

After all, you paid the $100 entry fee and you’ve gone to 3 of the 8 sessions, so you might as well finish, right?

Of course not. If you don’t feel you are getting anything out of it, bail. Write off the money and the time you spent, and save yourself from the other five classes. Don’t waste any more of your time.

4. “I might as well continue dating someone bad for me because I’ve already invested so much in them.”

This is unfortunately all too common.

If you put a lot of emotional investment into a relationship, it can be very challenging to break it off. This can be true of any relationship, not just romantic ones. Perhaps one of your good friends is no longer a positive influence on you. Years of emotional investment makes it very uncomfortable to cut your ties, but you might have to.

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Well, How Do I Free Myself?

We fall victim to the sunk cost fallacy because we are emotionally invested in whatever money, time, or any other resource we have committed in the past. The most important step to freeing yourself from making poor decisions based on sunk costs is to recognize the logical fallacy. Simply being aware of it will help you tremendously in making more rational decisions in the future.

By reading this article, you’ve already taken that huge first step.

But when that isn’t enough, I suggest you write out a pros and cons list. If the only pro of continuing to do something is to feel better about the emotional investment you’ve made, clearly you should go in the other direction.

Despite how common this fallacy is, you can see through it fairly easily most of the time. Don’t let it make you act stupidly.

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Last Updated on June 13, 2019

How to Quit Your Boring Life and Start Living an Interesting One

How to Quit Your Boring Life and Start Living an Interesting One

Think you have a boring life?

The definition of boring is dull or not interesting. Maybe you’ve been doing the same thing and living the same life for too long, or maybe your daily routine is limiting your growth and happiness. Whatever your reason is, the following list of 20 things can definitely make any day more interesting. Some of them are silly, while some are more meaningful, so hopefully just reading the list makes your life less boring and sparks your creativity.

Let’s dive in the list to quit your boring life and start living an interesting (and meaning) one!

1. Channel Your 7-Year-Old Self

What would he or she want to do right now? Color? Paint? Run around outside? Play dress up? Eat with your hands? Play that instrument hiding in the back of your closet that you haven’t touched in years?

Just because you’re a grown up doesn’t mean any of this stuff will be less enjoyable than you remember it. Give yourself permission to play.

2. Go Play with Kids

Speaking of little kids, if you have your own or access to any (in a non-creepy way, like they’re your niece or your best friend’s kid, you get the idea) go play with them!

They didn’t create an entire show called Kids Say The Darndest Things because kids aren’t hilarious. They also keep things so simple, and we can really stand to be reminded of this and stop allowing ourselves to get bogged down in boring details.

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3. Order a Hot Dog

While you’re eating it, Google: “What’s in a hot dog?” You decide whether or not you want to finish it.

4. For the Ladies: Wear Your Sexiest Lingerie Under Your Work Clothes

Your “little secret” will leave you feeling anything but boring all day!

5. Play Cell Phone Roulette

You’ll need at least one buddy for this. Scroll through the contacts in your phone, stop on a random one and call the person.

You could spark an incredible catch up session or be incredibly awkward. Neither are boring.

6. Fill out a Pack of Thank-You Cards

Give them to random people who probably don’t get thanked too often for doing what they do ever day.

Ideas: police officers, librarians, servers, baristas, cab drivers, sanitation workers, teachers, people behind any check out counter, receptionists, your friends, the guy at the falafel stand, etc.

7. Sign up for a Class in Something You’ve “Always Wanted to Do”, or Something That Makes You Really Uncomfortable

Ideas: pole dancing, salsa lessons, improv, pottery, cooking, knitting (yup, there are classes for this, too!), karate, boxing, something techy like the workshops they run in Apple stores, get Rosetta Stone and learn that language you’ve always wanted to speak, etc.

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What’s good about joining an interest class is that you will also meet new people!

8. Interview Your Grandparents About Their Lives

You can bet they’ve had some crazy experiences you probably never knew about.

9. Get up on Stage at an Open Mic Night

Whether you’re funny or not, get up on stage and just talk funny. And if you’re not, memorize a few of your favorite jokes and tell those!

10. Do Something for Someone Else That You Wish Someone Would Do for You

We all have a few ideas on this list. I promise you will feel amazing after and anything but bored.

11. Start a DIY Project in Your Home

It doesn’t have to be super complicated. If you need ideas, there’re plenty on Pinterest. Or you can also check out these 30 Awesome DIY Projects that You’ve Never Heard of.

12. Plan a Weekend Trip or an All-Out Vacation

This will give you something to look forward to.

Even if you don’t have the time or money to go on a vacation, plan for a staycation, which is same fun and relaxing!

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13. People Watch

Find a bench in a crowded area (centers of transportation like airports, bus stops and train stations are great for this!) and just observe.

People are infinitely interesting.

14. Eat Something You’ve Never Eaten Before

Bonus points if it’s a random fruit or veggie.

15. Dance

You can get your friends together for a night on the town or just pull up a video on YouTube and bust a move from your own living room.

If you’re feeling extra brave, you can even dance in public and get other people involved.

16. Go to YOUTUBE and Search “Funny Pets” or “Funny Babies”

This is also a great quickie ab workout as you will be laughing hysterically.

17. Pick up a Book and Start Reading

Check out the NY Times Best Sellers lists and grab a new book you can get lost in.

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18. Step Away from the Computer and Go Get Some Time with People You Care About in Real Life

Facebook stalking doesn’t count as real social interaction. You can even share this post with your friends and vote on which one you’d like to do together!

19. Check out a Museum You’ve Never Been to Before

OK, depending on your interests, this one might actually be boring. If you love learning, art or different cultures though, this one is for you!

20. Write a List of Things You Desire and Truly Want

This is a great way to help you figure out the real reason why you’re feeling bored about your life. Maybe you haven’t really done things that you truly enjoy? Maybe what you’ve wanted to do all the time has been left behind?

Think about the list of things you really want to do, and ask yourself why you aren’t doing these things (yet). Then start taking your first step to make what you want happen.

Now go make your life interesting and live your dream life!

More About Living a Fulfilling Life

Featured photo credit: Kev Costello via unsplash.com

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