Page 1 of 2
#1
P. sure we've had a thread on this but it was a while ago so hey ho.

http://www.lifehack.org/articles/communication/how-the-sunk-cost-fallacy-makes-you-act-stupid.html

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.

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" for this and how do you jut decide to cut your losses?

I think sometimes that the fallacy is true - like the relationship example or the classes example or even the food one, but sometimes it's a bit stupid. I mean you could go to something you don't thing you want to go to because you've spent the money but then actually end up having a good time despite it. So it's weird.

longing rusted furnace daybreak seventeen benign nine homecoming one freight car
#4
“I might as well keep going to a bad/useless class that I paid for.”

Either scrape through the shitty class to get my degree, or be completely unemployable because I don't have the degree.
Quote by Axelfox
Reeeeeeeeeeeeeeee

Quote by H4T3BR33D3R
I also have to do that. Cottaging this weekend
Last edited by T00DEEPBLUE at Dec 1, 2014,
#5
Quote by T00DEEPBLUE
Either scrape through the shitty class to get my degree, or be completely unemployable because I don't have the degree.


It's who you know not what you know



longing rusted furnace daybreak seventeen benign nine homecoming one freight car
#6
Quote by EndTheRapture51
It's who you know not what you know



I know, but not having a degree doesn't exactly help your chances either.

I get the basic premise of the article, but the scenarios it puts forwards are way too simplistic to support its own points very well. They ignore too many external variables.
Quote by Axelfox
Reeeeeeeeeeeeeeee

Quote by H4T3BR33D3R
I also have to do that. Cottaging this weekend
Last edited by T00DEEPBLUE at Dec 1, 2014,
#7
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.

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.


There is a massive flaw in logic here. Who says you won't enjoy the concert because you have a cold? I for one would rather be ill at a gig than ill at home and miserable about the fact that I am missing out on the gig. I am losing nothing by going to the gig and gaining nothing by not going.
Quote by CV334

Sir, the contents of my mouth just blew all over my keyboard, desk, and part of my monitor. For the record, it was slightly chewed Keebler cookies and coffee slurry.

The average pitmonkey's response to my jokes.
#9
I can def put up with discomfort to save money. Eg: I often find that I am allergic/sensitive to certain moisturizers so I keep using it until its empty and then I get a different type after. I don't enjoy using it by any means, but it's better than the alternative.
cat
#11
Quote by Tanglewoodguit
You never snap chat me anymore

I've been taking a snapbreak for finals and I have eczema all over the place
cat
#12
Quote by EndTheRapture51
It's who you know not what you know




is your goal to have like most cliches in a single thread or something?

EDIT: OT the only thing remotely close to this I have is I buy a lot of alcohol, mostly different things like local beer or strange rum. some of it I don't like so I just give it away

I'm certainly not going to drink it if I don't like it, but there's always someone I know that's happy to have it
It's over simplified, So what!

Quote by eGraham
I'm going to be on top of what is called a knob
Quote by theguitarist
Big ones can be fun in some ways but generally, they are a pain in the ass.
Quote by Wolfinator-x
I don't know what is going on in this thread or why I have an erection.
Last edited by Obsceneairwaves at Dec 1, 2014,
#14
I'm too poor/tight to experience this. I'M EIGHT-FUCKING-TEEN
A poem.
Quote by yoman297
no girl, movember isnt for you. shave your stache pls

I can out-bore you any day
#15
Quote by Pastafarian96
I'M EIGHT-FUCKING-TEEN


horribly inappropriate we should call child services
It's over simplified, So what!

Quote by eGraham
I'm going to be on top of what is called a knob
Quote by theguitarist
Big ones can be fun in some ways but generally, they are a pain in the ass.
Quote by Wolfinator-x
I don't know what is going on in this thread or why I have an erection.
#16
Quote by Obsceneairwaves
horribly inappropriate we should call child services

It's self-inflicted
A poem.
Quote by yoman297
no girl, movember isnt for you. shave your stache pls

I can out-bore you any day
#17
i don't think this is really intended for everday situations but life hack dot org ya know
i don't know why i feel so dry
#19
Sunk cost fallacy fallacy - These is no way of knowing if a project will be a failure or a movie will be terrible until the end so using sunk cost fallacy as an excuse to quit is fallacious.
#20
My mother is falling for it severely right now. She's been living in a rented home. Despite being rented, she's put enough work and renovation into the home to raise it's property value maybe $10,000. The landlord wants to sell the house but won't give her a break for her renovations. The house is still a great deal, but she's looking for a house to buy elsewhere because she's upset about the money (and labor) she's already given but can't give back. I keep telling her that the landlord may be a dick, but that's not how financial decisions work.
#21
This seriously is among the worst concepts ever.

The author of that article sucks more dick than TS.
And also smokes much more shite.
Name's Luca.

Quote by OliOsbourne
I don't know anything about this topic, but I just clicked on this thread because of your username :O
Quote by Cajundaddy
Clue: amplifiers amplify so don't turn it on if you need quiet.
Quote by chrismendiola
I guess spambots are now capable of reading minds.
#22
Quote by Spambot_2
This seriously is among the worst concepts ever.

The author of that article sucks more dick than TS.
And also smokes much more shite.


uh not really. the sunk cost fallacy is pretty important in finance. like serious finance.
i don't know why i feel so dry
#24
i feel like this is a serious misinterpretation and misrepresentation of a rather important concept and following this poor logic religiously would make yr life shittier
#25
Quote by Thrashtastic15
i feel like this is a serious misinterpretation and misrepresentation of a rather important concept and following this poor logic religiously would make yr life shittier


life hack dot org
i don't know why i feel so dry
#26
Yeah, only keep at it w/ sunk costs if the remaining time is immaterial/end result can be 'wrong' but advantageous (tho that's still technically 'illogical' in a sense) ex: semester of school to get degree.

Otherwise, cut that shit out /ur wasting time. Sucks to be working on some amazing upgrade to VCR's after Blu-ray drops
.
#27
Quote by Macabre_Turtle
My mother is falling for it severely right now. She's been living in a rented home. Despite being rented, she's put enough work and renovation into the home to raise it's property value maybe $10,000. The landlord wants to sell the house but won't give her a break for her renovations. The house is still a great deal, but she's looking for a house to buy elsewhere because she's upset about the money (and labor) she's already given but can't give back. I keep telling her that the landlord may be a dick, but that's not how financial decisions work.


Damn, that's a real shame man


What are some of the improvements like? You guys should try calling up a lawyer near you since $10,000 seems a bit significant and worth fighting for some equitable remedy. I mean, I don't know, but I'm thinking it's not recoverable (but some might be - Never know til you find a lawyer) .

See a lawyer! At least for a quick, free consultation. I dont know what the lease contract is like/PA contract law, but idk;landlord might be just trying to fk over your mom with stubbornness rather than knowing the legal details.
.
Last edited by Fat Lard at Dec 1, 2014,
#28
I paid for a tennis club membership once and it was enjoyable for some time. Since it was a year membership or whatever I kept going to play tennis in winter even though playing in winter is horrible and I could've spent the time doing other stuff. So yeah sunk cost is a bad thing when you keep going to something that you're not enjoying.

longing rusted furnace daybreak seventeen benign nine homecoming one freight car
#29
Quote by EndTheRapture51
I paid for a tennis club membership once and it was enjoyable for some time. Since it was a year membership or whatever I kept going to play tennis in winter even though playing in winter is horrible and I could've spent the time doing other stuff. So yeah sunk cost is a bad thing when you keep going to something that you're not enjoying.


That reminds me of a friend who bought a boat and was like "I've gotta use it x times/year to get my money's worth!"

But I think (EDIT) the article's wrong about relationships/human stuff 'illogicaly keeping at it'. Like damn, basing a break-up or something completely on present and disregarding the past experiences wouldn't always be the greatest
.
Last edited by Fat Lard at Dec 1, 2014,
#30
it should be called sunk cost eh-it-doesn't-matter-so-much
Quote by archerygenious
Jesus Christ since when is the Pit a ****ing courtroom...

Like melodic, black, death, symphonic, and/or avant-garde metal? Want to collaborate? Message me!
#31
Quote by EndTheRapture51

I think sometimes that the fallacy is true - like the relationship example or the classes example or even the food one, but sometimes it's a bit stupid. I mean you could go to something you don't thing you want to go to because you've spent the money but then actually end up having a good time despite it. So it's weird.
It's always a fallacy the examples are not super good examples, however. For instance, the concert would be a more demonstrable sunk-cost if you went and didn't enjoy it, but decided to stay because you had spent the money. You're not gaining any returns by staying.

I'm sure I fall for it sometimes but I honestly don't think I've encountered scenarios like this in recent memory.
#32
Quote by Fat Lard
That reminds me of a friend who bought a boat and was like "I've gotta use it x times/year to get my money's worth!"

But I think (EDIT) the article's wrong about relationships/human stuff 'illogicaly keeping at it'. Like damn, basing a break-up or something completely on present and disregarding the past experiences wouldn't always be the greatest

Thing is that not everything in a relationship is a sunk cost.
Quote by Carmel
I can't believe you are whoring yourself out like that.

ಠ_ಠ
#33
10/10 life hack
Quote by jakesmellspoo
ooh look at me i'm ERIKLENSHERR and i work at fancy pants desk jobs and wear ties and ply barely legal girls with weed and booze i'm such a classy motherfucker.
#34
what kind of little bitch skips out on a concert because they have a cold?
Quote by yellowfrizbee
What does a girl have to do to get it in the butt thats all I ever wanted from you. Why, Ace? Why? I clean my asshole every night hoping and wishing and it never happens.
Bitches be Crazy.

▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ஜ۩۩ஜ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬
#35
the real takeaway here should be that loss aversion is a really strong motivator.

as a sidenote, i have bad useless classes that i still go to simply so i can get an idea of what i'm going to be tested on and i need the credits even though theyre pretty fraudulent and only afford me a mock degree.
#36
Yeah I understand that. Spending your time doing something out of guilt avoidance/fear of loss isn't as rewarding as doing that thing because it's actually rewarding.


Though the article pits this as "being smart vs being dumb" it'd just be better to train yourself not to form material attachments.
#37
Quote by Fat Lard
Damn, that's a real shame man


What are some of the improvements like? You guys should try calling up a lawyer near you since $10,000 seems a bit significant and worth fighting for some equitable remedy. I mean, I don't know, but I'm thinking it's not recoverable (but some might be - Never know til you find a lawyer) .

See a lawyer! At least for a quick, free consultation. I dont know what the lease contract is like/PA contract law, but idk;landlord might be just trying to fk over your mom with stubbornness rather than knowing the legal details.


Painted every wall of the house. Twice. Renovated a dingy basement bathroom that hadn't been opened in decades, including having replaced the toilet, sink, and mirror/cabinet. Fixed the backyard that was previously overgrown with vines and wildly uneven, bringing in dirt to level it out and reseeding the grass. Decorating the immediate surrounding of two sides of the house with rocks and bricks. Just the first things to come to mind. I couldn't imagine there'd be anything a lawyer can do. She renovated somebody else's property for free fair and square.

I think people are underestimating the usefulness of the sunken cost fallacy. My econ class that taught it didn't present it to us as some concept for big businesses and such to use. It was given to us as something we could be and should be actively considering in our every day lives.
#38
Quote by Tanglewoodguit
yeah but how does this affect women's rights tho


think spending money on dames to win their affection

it's like

well i've already invested 100 moneys that i'm not getting back

so do i keep spending money on her or do i just cut my losses

but if i stop then i'll have wasted my 100 monies that i put in
There's no such thing; there never was. Where I am going you cannot follow me now.
#39
Life is a sunk cost.

kill yrself

or yr idols

i don't care
| (• ◡•)| (❍ᴥ❍ʋ
Last edited by Cianyx at Dec 1, 2014,
#40
Quote by Dr.Cheese
Sunk cost fallacy fallacy - These is no way of knowing if a project will be a failure or a movie will be terrible until the end so using sunk cost fallacy as an excuse to quit is fallacious.

Using the sunk cost fallacy fallacy fallacy is a form of false dichotomy. You can know when something is not worth your time without even finishing it.

Like sure you can stick around for a degree but what use is that if you don't even enjoy the work the degree entails
| (• ◡•)| (❍ᴥ❍ʋ
Last edited by Cianyx at Dec 1, 2014,
Page 1 of 2