The Sunk Cost Fallacy is when you keep throwing time, money, or effort at something just because you've already invested so much into it, even when it's painfully clear that cutting your losses would be the smarter move. It's like being halfway through digging a hole and realizing it's the wrong spot... but you just keep digging because you've already come this far.
I've seen this one firsthand more times than I can count. A client hires me to look at a Microsoft Access database that someone else built for them. And I can see it right away - it's a complete mess. Duct-taped forms, broken relationships, tables doing things tables should never do. So I tell them, "Look, it would take me three times as long (and cost you three times as much) to fix this than it would to build a new system from scratch and just import the data." And what do they say? "Yeah, but I've already spent twenty thousand dollars on this thing." They feel like they have to keep going, just to justify the money already spent. That's the sunk cost fallacy at work. The database is bad. The logic is worse.
Now, if I were a consultant without morals or scruples, every time I heard a client say this, I'd just hear little cash registers going off in my head and think, "Okay, no problem, I'll fix it. Here's the cost." But I can't do that. I was raised right. So I spend a reasonable amount of time trying to explain why rebuilding the database would be better in the long run. Do they always listen? No. But to be fair, I've also turned down projects flat-out when something was beyond repair. I can accept a little jankiness here and there, maybe slap a band-aid on a system that mostly works. But when it's a complete disaster - when it's a full-on digital dumpster fire - I've walked away. You have to know when to say no. And no, the client is not always right. That's a whole other Captain's Log I've got coming up. Spoiler: the full quote is, "The customer is always right... in matters of taste." Which is not the same thing as, "The customer is always smart."
You see the sunk cost fallacy everywhere. A gym membership that hasn't been used since you gave up on your New Year's Resolution five months ago, but you keep paying for it because you've been paying for it for three years now and "one of these days" you'll start going again. (Sure you will.) Or you're 30 minutes into a terrible movie, it's going nowhere, the acting is awful, the plot makes no sense... but you keep watching because you've already wasted half an hour. Might as well waste the next hour too, right? I'm personally really bad at this one. I want the movie to get better. Most of the time it just doesn't. My wife wants to kill it 10 minutes in and I'm like "just give it time to develop." Spoiler: it never does.
Same goes for unfinished books, projects that went sideways, failing businesses, or relationships that haven't made you happy in years. You stay in because of what you've already invested, even if the logical choice is to walk away.
A perfect example of the sunk cost fallacy shows up in The Ensigns of Command. Data is sent to evacuate a human colony on Tau Cygna V, which now falls under Sheliak control. The colonists are told to leave or face total destruction. But their leader, Gosheven, refuses. He argues that they've spent generations building their homes, their infrastructure, their legacy. They've poured everything into this place. And because of that, they'd rather risk complete annihilation than walk away. That's sunk cost logic in a nutshell. They're so emotionally invested in what they've already built that they can't see the smarter move is just to leave and start again somewhere safer. Data, of course, being Data, cuts through the emotion with logic - and a phaser.
The sunk cost fallacy isn't about logic - it's about pride, fear, and that awful feeling of letting go of something you once believed in. But here's the truth: the past is already spent. The only question that matters now is, "What's the best move going forward?" Don't throw more into a hole just because you already dumped a fortune in it. Turn around, save your time, save your money, and maybe even salvage your evening from a bad movie.
I use to see this all the time when I played texas hold em. "I already bet a quarter of my stack so at this point I can't fold. I'm all in with Ace high."
At least then though sometimes your bluff paid off ;P.
I used to be this way with books. I’d finish a bad book just because I had spend the time and money to start it. It’s funny how as I get older, I value my time more and more. So now it’s easier to abandon a book that remains a dog after a reasonable number of pages. And Libby and Hoopla are my friends 😂
I used to be the same way with home projects. I'd start building, let's say a shelf in the garage or something, and I'd go to Home Depot and spend $30-$40 on parts. I'd run into problems and issues. I'd spend the whole weekend just trying to get that thing right even though I had no clue what I was doing... but I had $40 invested in it.
Now my time is more valuable. If I can't do something in less time than it would cost to hire a professional, I'd rather hire the professional because my time is more valuable than wasting a whole weekend building a stupid shelf in the garage when I can have a handyman come in and do it in an hour.
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