24 Mar

Cutting loose from the sunk cost fallacy

Have you ever heard of sunk cost fallacy? I haven’t till a few years ago when a lecturer on Economical behaviour was explaining how exactly so many people got hooked to Farmville. At one point apparently, there were 84 million Facebook users playing that game. As it seems our human brain has few biases which were formed to aid our survival as species, one of them is the sunk costs. Simply put – we tend to commit to unfavourable situations because we have made an investment – money, time or emotions (sometimes all 3 of them)

Ticket for the wrong concert

I remember a few years back I had a pretty tough schedule in the summer. I was a tour guide at the time and sleep and family time were scarce during high season. There was a week of cultural events 30 km away from my city and one of the evening there was a concert of my favourite Bulgarian kaval player Teodosii Spasov. He was the first famous person I have interviewed when I was 16 and just started my career as a TV host. Besides playing wonderful music, he has a special place in my heart. So we got our tickets and I went through many loopholes to have the day off. I was counting the days to the event! Off we went, and I was the happiest bunny one can ever imagine.

We went to the concert hall ordered our drinks and sunk into the atmosphere. 20 min down the line we were still trying to enjoy the experimental jazz of the performer on stage, waiting in anticipation for our guy. After 20 more min, I mustered the courage to interrupt a couple who were in a state of bliss and asked them if they know when Teodosii is performing. The answer was disheartening – he played the night before…. we got it all wrong. All my expectations for an unforgettable etno jazz night were shattered. The guy who was performing now was a world famous musician. Had I been an experimental jazz connoisseur, was going to be elated, but I wanted my etno jazz night.

Despite my utter disappointment, my sunk cost fallacy kicked in big time! I had made so much efforts to go to that concert, that I was going to stick through it, although I was not enjoying it. Luckily at some point, it got so unbearably hot, that the cost of staying was higher than the sunk costs and we left the hall. Once that decision was made, a disastrous evening of disappointment and self-torment turned into an amazing experience.

The mental strength to cut losses

Sunk cost fallacy has many forms no matter if a financial or emotional investment is done. We tend to stick to our choices although we know they are of no benefit, sometimes they even harm us.

We could say that we have won a battle in our mental board room when we manage to put our foot down and say “Enough is enough”. During the last two months I had the chance to witness what great mental power and agility it takes to do so. Especially when a big sum of money, time and resources are invested.

Today I was invited for an amazingly delicious brunch and had a chance to have a conversation with friends of mine. I discovered they are going through a similar process of cutting loose ends, simplifying and having a step back to evaluate what really matters. (Oh yes, they are one of the couples in my Valentine’s post :))

My takeaway is – a good mentor is not the one who teaches you only how to succeed, a good mentor is the one who teaches you how to reinvent yourself after you have fallen. But an even better mentor is the one who teaches you how to fall safely, how to withdraw from the battle in order to spring back into a fighting position.

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