As I sat down today deciding what to write, I kept 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.
Still, I kept refining the article because I had 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 and emotional investment, the article wasn't going anywhere. It just sucked.
Without even noticing it, I had fallen 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 30 minutes, just to make sure. After another 30 minutes, you've waited a total of 60 minutes. Now you tell yourself you can easily wait another 15 minutes, because you've already invested 60 minutes 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 60 minutes. But that's flawed logic. The likelihood of the bus arriving does not change based on our prior investment of time waiting for the bus. The 60m minutes waiting time we invested is a sunk cost and does 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. We paid for it so it would be a waste to not eat it, right? Dealing with the fact that we spent money on food that we throw away seems like even more of a loss than eating until we get sick.
The sunk cost fallacy completely blurs our rational decision making.
I remember working on a project called .Mail app several years ago. It was a new idea for an email client. 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 for more than a year was because of the emotional investment I had in it. I had also spent countless hours of my time, and others' time, trying to make it come alive. 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 most likely also a victim of the sunk cost fallacy. This can be a side project or a full-time job you've been working at for too long. You've already stuck it out for two years. You can do another year, right? At least that's what you tell yourself.
Essentially it means defending an investment you've made by investing even more. Although you have no specific reasoning for it other than your prior investment. It's a circle.
“Seize the day, then let it go.” ― Marty Rubin
The sunk cost fallacy is often used as a powerful tool that we designers use to make our products more "sticky."
Games such as World Of Warcraft or Farmville are prime examples of the sunk cost fallacy. 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 every day. 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 getting better at it. I try to ask myself this question every day: 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?