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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.

More by this author

Michael Davidson

Michael teaches English in Israel while blogging about how to live a happier and healthier life.

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Last Updated on March 30, 2020

What Does Self-Conscious Mean? (And How to Stop Being It)

What Does Self-Conscious Mean? (And How to Stop Being It)

Have you ever walked into a room and felt like your nerves simply couldn’t handle it? Your heart beats fast, you start to sweat, and you feel like all eyes are on you (even if they’re really not). This is just one of the many ways that being self-conscious can rear its ugly head.

You may not even realize you’re self-conscious, and you may be wondering, “What does self-conscious mean?” That’s a good place to start.

This article will define self-consciousness, show how practically everyone has faced it at one point or another, and give you tips to avoid it.

What Does Self-Conscious Mean?

According to the Merriam-Webster dictionary, self-conscious is defined as “conscious of one’s own acts or states as belonging to or originating in oneself.”[1]

Not so bad, right? There’s another definition, though — one that speaks more to what you’re going through: “feeling uncomfortably conscious of oneself as an object of the observation of others.” For those of us who regularly deal with extreme self-consciousness, that second definition sounds about right.

There are many different ways self-consciousness can spring up. You may feel self-conscious around people you know, like your family members or closest friends. You may feel self-conscious at work, even though you spend hours every week around your co-workers. Or you may feel self-conscious when out in public and surrounded by strangers. However, you probably don’t feel self-conscious when you’re home alone.

How to Stop Being Too Self-Conscious

When you’re in the throes of self-consciousness, it’s nearly impossible to remember how to stop feeling that way. That’s why it’s so important to prepare ahead of time, when you’re feeling ready to tackle the problem instead of succumbing to it.

Here are a variety of ways to feel better about yourself and stop thinking about how others see you.

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1. Ask Yourself, “So What?”

One way to banish negative, self-conscious thoughts is to do just that: banish them.

The next time you walk into a room and feel your face getting red, think to yourself, “So what?” How much does it really matter if people don’t like how you look or act? What’s the worst that could happen?

Most of the time, you’ll find that you don’t have a good answer to this question. Then, you can immediately start assigning such thoughts less importance. With self-awareness, you can acknowledge that your negative thoughts are present and realize that you don’t agree with them.[2] They’re just thoughts, after all.

2. Be Honest

A lie that self-consciousness might tell is that there’s one way to act or feel. Honestly, though, everyone else is just figuring life out as well. There isn’t a preferred way to show up to an event, gathering, or public place. What you can do is be honest with your feelings and thoughts.[3]

If you feel offended by something someone says, you don’t have to smile to be polite or laugh to fit in with the crowd. Instead, you can politely say why you disagree or excuse yourself and find a group of people who you relate to better. If you’re nervous, don’t overcompensate by trying to look relaxed and casual — it’ll be obvious you’re putting on a front. Instead, nothing is more endearing than saying, “I’m a little nervous!” to a room of people who probably feel the exact same way.

On the same note, if you don’t understand why someone wants you to do something, question it. You can do this at work, at home, or even with people you don’t know well. Nobody should force you to do something you don’t want to do.

Also, even if you’re willing to do what’s asked of you, there’s nothing wrong with asking for more clarification. People will realize that you’re not a person to be bossed around.

3. Understand Why You’re Struggling at Work

Being self-conscious at work can get in the way of your daily responsibilities, your relationships with co-workers, and even your career as a whole. If you’re facing some sort of conflict but you’re too nervous to speak up, you may be at the whim of what happens to you instead of taking some control.

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If you’re usually confident at work, you may be wondering where this new self-consciousness is coming from. It’s possible that you’re dealing with burnout.[4] Common signs are anxiety, fatigue and distraction, all of which can leave you feeling under-confident.

4. Succeed at Something

When you create success in your life, it’s easier to feel confident[5] and less self-conscious. If you feel self-conscious at work, finish the project that’s been looming over your head. If you feel self-conscious in the gym, complete an advanced workout class.

Exposing yourself to what you’re scared of and then succeeding at it in some way (even just by finishing it) can do wonders for your self-esteem. The more confidence you build, the more likely you are to have more success in the future, which will create a cycle of confidence-building.

5. Treat All of You — Not Just Your Self-Consciousness

Trying to solve your self-consciousness alone may not treat the root of the problem. Instead, take a well-rounded approach to lower your self-consciousness and build confidence in areas where you may struggle.

Even professional counselors are embracing this holistic type of treatment[6] because they feel that the health of the mind and body are inextricably linked. This approach combines physical, spiritual, and psychological components. Common activities and treatments include meditation, yoga, massage, and healthy changes to diet and exercise.

If much of this is new to you, it will pay to give it a try. You never know how it will impact you.

If you’re feeling self-conscious about how your body looks, a massage that makes you feel great could boost your confidence. If you try a new workout, you could have something exciting to talk about the next time you’re in a group setting.

Putting yourself in a new situation and learning that you can get through it with grace can give you the confidence to get through all sorts of events and nerve-wracking moments.

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6. Make the Changes That Are Within Your Control

Let’s say you walk into a room and you’re self-conscious about how you look. However, you may have put a lot of time and effort into your outfit. Even though it may stand out, this is how you have chosen to express yourself.

You have to work on your internal confidence, not your external appearance. There’s nothing to change other than your outlook.

On the other hand, maybe there’s something that you don’t like about yourself that you can change. For example, maybe you hate how a birthmark on your face looks or have varicose veins that you think are unsightly. If you can do something about these things, do it! There’s nothing wrong with changing your appearance (or skills, education, etc.) if it’s going to make you more confident.

You don’t have to accept your current situation for acceptance’s sake. There’s no award for putting up with something you hate. Confidence is also required to make changes that are scary, even if they’re for the better. Plus, it may be an easier fix than you thought. For example, treating varicose veins doesn’t have to involve surgery — sometimes simple compression stockings will take care of the problem.[7]

7. Realize That Everyone Has Awkward Moments

Everyone has said something awkward to someone else and lived to tell the tale. We’ve all forgotten somebody’s name or said, “You too!” when the concession stand girl says to enjoy our movie. Not only are these things uber-common, but they’re not nearly as embarrassing as you feel they are.

Think about how you react when someone else does something awkward. Do you think, “Wow, that person’s such a loser!” or do you think, “What a relief, I’m not the only one who does that.” Chances are good that’s the same reaction others have to you when you stumble.

Remember, self-consciousness is a state of mind that you have control over. You don’t have to feel this way. Do what you need to in order to build your confidence, put your self-consciousness in perspective, and start exercising your “I feel awesome about myself” muscle. It’ll get easier with time.

When Is Being Self-Conscious a Good Thing?

Self-consciousness can sometimes be a good thing[8], but you have to take the awkwardness and nerves out of it.

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In this case, “self-aware” is a much better term. Knowing how you come off to people is an excellent trait; you’ll be able to read a room and understand how what you do and say affects others. These are fantastic skills for people work and personal relationships.

Self-awareness helps you dress appropriately for the occasion, tells you that you’re talking too loud or not loud enough, and guides a conversation so you don’t offend or bore anyone.

It’s not about being someone you’re not — that can actually have adverse effects, just like self-consciousness. Instead, it’s about turning up certain aspects of yourself to perform well in the situation.

Final Thoughts

When you’re self-conscious, you’re constantly battling with yourself in an effort to control how other people view you. You try to change yourself to suit what you think other people want to see.

The truth, though, is that you can’t actually control how other people view you — and you may not even be correct about how they view you in the first place.

Being confident doesn’t happen overnight. Instead, it happens in small steps as you slowly build your confidence and say “no” to your self-consciousness. It also requires accepting that you’re going to feel self-conscious sometimes, and that’s okay.

Sometimes worrying that there is a problem can be more stressful than the problem itself. Feeling bad for feeling self-conscious can be more troublesome than simply feeling it and getting on with the day.

Forgive yourself for being human and make the small changes that will lead to better confidence in the future.

More Tips for Improving Your Self-Esteem

Featured photo credit: Cata via unsplash.com

Reference

[1] Merriam-Webster: Self-conscious
[2] Bustle: 7 Tips On How To Stop Feeling Self-Conscious
[3] Marc and Angel: 10 Things to Remember When You Feel Unsure of Yourself
[4] Bostitch: How to Protect Small Businesses From Burnout
[5] Psychology Today: Self-conscious? Get Over It
[6] Wake Forest University: Embracing Holistic Medicine
[7] Center for Vein Restoration: What Causes Venous Ulcers, and How Are They Treated?
[8] Scientific American: The Pros and Cons of Being Self-Aware

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