As I sat down today to write my weekly article I kept on refining a specific article I wanted to share with you. It took me most of my evening but I just couldn't get excited about the piece, it just wasn't good.
I still kept refining the article because I already invested so much time in it. I was also emotionally invested in that topic for the last couple days, so I felt like I need to write about it for some reason.
But besides the time & emotional investment the article wasn't going anywhere. It just sucked.
Without even noticing it first, I almost fell for the Sunk Cost Fallacy.
In economics, a sunk cost is a cost that has already been paid and can't be recovered. Which means, any future decisions should not be affected by the sunk cost, because it's already gone anyway.
Or let me give you another example:
Let's say you've been waiting at the bus stop for 30 minutes now, but the bus hasn't arrived.
You tell yourself to wait another 30min, just to make sure. After another 30min you waited a total of 60min. Now you tell yourself you can easily wait another 15min, because you've already invested 60min of your time and the bus should probably arrive any second.
It's a never ending story.
The truth is, our decisions are manipulated by our investments. These investments can be time, financial or emotional. The more we invest, the harder it will be to abandon something.
We mistakenly think that the bus must arrive at any second, because we've already waited for more than 60min. But that's bullshit.
The likely hood of the bus arriving does not change based on our prior investment of time waiting for the bus. The 60min waiting time we invested are sunk cost and do not increase the chance of the bus arriving anytime sooner.
The sunk cost fallacy makes us eat more food than we're actually hungry for. Because we paid for it, so it would be a waste to not eat it right? As you can imagine, this mostly backfires because we get so full that we don't even enjoy our it anymore.
But we also can't stop eating. Dealing with the fact that we spent money on food that we throw away seems even more of a loss than just keep eating until we get sick.
The sunk cost fallacy completely blurs our rational decision making.
I remember working on a project called .Mail app. It was a new idea for an email client a couple years ago. I worked on it for about 2-3 years before I officially shut it down.
If I'm honest with you, the only reason I kept working on it more than a year was because of the emotional investment I had in it. I was driven by pride and the fear of publicly giving up. I fell victim to the sunk cost fallacy.
If the only reason you're still working on something is because of pride and "because I invested so much time in it" you're much likely also victim to the sunk cost fallacy.
This can be a project you are working on, or a full-time job you've been working at for too long. If you already were sticking around for two years, you can do another year, right? At least that's what we tell ourselves.
Essentially it means defending an investment you've made by investing even more. All though you have no specific reason for it other than your argument being your prior investment. It's a circle.
“Seize the day, then let it go.” ― Marty Rubin
The sunk cost fallacy is also often used as a powerful tool that we designers can use to make our products more "sticky".
Games such as World Of Warcraft or Farmville are prime examples of the sunk cost fallacy at work. A lot of people started playing these games for fun and entertainment, but kept playing because of the investment they've made in the game.
For many people there is little joy in playing these games anymore, but they still do because they've already invested so much time in it. Simply abandoning these games would make no sense to them, because it would seem as a loss. But then again, the loss has already happened regardless.
The sunk cost fallacy is around us everyday. We're emotional creatures and this is why we keep falling for it every single time.
Being aware that the sunk cost fallacy exists is the first step to get better at it. I try to ask myself this question everyday: Why am I'm still working on this? Is it because I think it's great, or is it simply because of the sunk cost fallacy?