The Sunk Cost Fallacy, and ways to avoid it

I am sure few of us are immune from this; the reluctance to give something up because we’ve invested money, time, effort and/or our heart into it.

“Cars” are my go-to analogy for this. Of the four cars I’ve owned, none of them have been under ten years old when I bought them and so inevitably they all needed ‘significant’ work doing to them at some point, whether it be new sills welded on them, a head gasket or clutch going, or drive shafts or steering racks that need replacing.

On one occasion I’d not long owned a car when the cam belt went, requiring ‘expensive’ work to fix the engine. I justified the cost because I’d already spent half as much again on the car itself, and I had struggled to find one that I liked and for the money I was prepared to spend. The car wasn’t actually ‘worth’ what I’d spent on it plus the repair costs, but I figured I could “get my monies’-worth out of it” in the long run. And I think I pretty much did, but that meant keeping the car for as long as possible, and inevitably other things needed replacing in the course of its life. Since my previous car before it I’d kept a detailed record/spreadsheet of what I’d ever spent, from parts to petrol. I think this enabled me to learn how things would go and I could better rationalise future decisions. Without this I can see how decisions would be made more with wishy-washy memories and feelings. Not that I don’t get attached to my cars.

I’ve grown to accept these things with cars, and how certain parts are likely to fail at some point, and I dispute the ‘Sunk Cost Fallacy’ somewhat on the grounds that when certain things have already been replaced once (such as a clutch, drive shafts, or brakes) they’re probably not going to need to be done again. I pretty much class a car as scrap once welding needs doing since in my experience this work only lasts a year (unless you’re paying for a proper restoration job).

But that’s enough about cars. There are of course other areas where the Fallacy plays out.

Many of the people who will be reading this will be fellow bloggers. We all invest a certain amount of time into our blogs, or if you are new to blogging you might hope/expect to be blogging for some years to come (perhaps you’ve not thought this far ahead). The same could be said of other platforms such as Instagram or Youtube. Perhaps some who join these platforms do so with hope or dream of becoming someone with a vast audience, or even generate their income from doing so.

But what if it doesn’t work out like that?

What if you wake up one day and suddenly consider that you haven’t yet “made it big”. Did you ever plan a time-frame for the thing to work out as you planned, or did you just dream? Maybe you need to give it more time, but how much time? Maybe you need to do something different. Maybe you need better equipment or to invest in advertising. Or maybe it’s time to move onto other things?

Sorry, I don’t mean to suggest that to you the reader (I hope your blog is doing great!) I don’t think I’m even suggesting it to myself, although I do occasionally consider where things are going, whether it be here on my blog, on my Neocities site, or on my various Youtube projects; I’ve invested time in these things and I consider my past self and how disappointing it would be to think I would do all of this that lies ahead, to just discard it. [Actually, what I generally find myself doing is filing things away that no longer have meaning for me in the present with the view to regurgitate them into a different form later on; perhaps a book of blog posts, or CDs of my story readings, for example].

All or these projects I have invested time in and continue to do so. For the most part I enjoy them, and that is primarily why I blog (although this is perhaps something to consider every now and then in the words of Marie Kondo: Does this thing Spark Joy?), even if they don’t command much of an audience. But how much of an audience is necessary? I think enough of an audience is necessary to generate some feedback, otherwise, why publish things for the world to see? Sometimes I continually create content for certain platforms with the dream that one day there will be a flurry of people finding their way to my content and they will be kept entertained by a vast back catalogue! (Rather than there being a flurry and it disappears again because there is not the content to sustain the interest). But then I realise that not everyone can have a million subscribers, since that would involve a pyramid scheme!

From time-to-time I come across deserted projects online (and it can be quite a depressing thing to encounter); the blog that hasn’t been written to since 2014, a website that hasn’t been updated in as long, or the once popular and now decade-old Youtube channel that has either been abandoned, descended into something mundane, or is kept going out of a routine of uploading something once a week.

Deserted projects exist offline too, and perhaps this is where hoarding typically takes root.

Sometimes content is actively and suddenly removed, by the creator I mean, rather than someone having their voice silenced, although sometimes it is as if such a person is silencing themselves, rage-quitting if you will. I relate it to a form of depression and I’ve experienced it myself.

I was once part of a kind of social networking online forum thing. I’d been a part of it, from what I can remember, for a few years. However, as much as I enjoyed the banter on the forums there, I came to realise that I’d never really formed any friends there, or at best only one or two; I felt like no one really knew me, or more precisely they perceived me in a way that wasn’t accurate or fair (I’ve felt like this at other times since). I remember the sense that people didn’t even like me there, although I think that was the style of the banter on the site; it’s not that I felt like people were being actively hateful towards me, but they weren’t being actively nice either. (I actually wonder if I have some kind of self-delusion/slight narcissism where I think other people should be actively nice to me while I’m not going out of my way to be engaging with others in that way – like being disappointed about not being invited to a party when I’ve never considered hosting one myself).

It suddenly happened that on one day when I was logged into that site I just decided to quit. I think I’d considered it before, and indeed in the forums it was occasionally joked about when someone quit but then came back some weeks later (since there was a “cooling off period” in the formal quitting process). I could perceive that it was some sort of internet addiction that brought people back and that it was some form of weakness that lured them back in. I didn’t let that happen to me. As much as I was addicted to the site (I can remember routinely logging in and scrolling through the forums, and repeatedly refreshing pages in the hope of new content to absorb), I just left and have barely looked back since.

How this relates to the Sunk Cost Fallacy is that I’d invested time into this pursuit; I’d participated in the forums, created a user profile, and sought out friendships there, perhaps I even hoped to find a partner. To just leave was to give up on that pursuit and for all of my time to have been in vain. In fact, I once found myself leaving a relationship in a somewhat similar fashion; it had “run its course” and yet I had been still desperately clinging on (as I used to do) to the dream of what it could have been. Where addiction is concerned (or unhealthy relationships in any form), I think a clear and concise cut-off is often the best way (although of course one should be fair to others involved, and, if possible, let them know your intentions or troubles).

I even discarded [my belief in] God during my childhood when I felt like that practice had let me down (I’ve come across a fair few examples of people leaving the Jehovah’s Witnesses, as a sort of example here, and such a thing is rarely trivial).

There is a fear of the unknown. “What lies ahead for me if I leave?” There is the anxiety of “going it alone”, being without that thing in your life, whether it be your participation in Facebook, your regular blogging for the sake of blogging, absorbing your daily dose of “the news”), or doing without your drug (whatever that may be).

I think the only way to rationalise any of this is to ask ourselves what such a thing we have invested in is doing for us now? Is it serving a purpose for you? Sometimes I have worried about the feelings of people I have been engaged with, but then, in the case of online stuff, I rationalise this with the consideration that these people don’t even know me, they don’t know the real me, they’ll get over it if I just quit.

If you planned to start something (like a blog, or maybe your own business) and you’ve found yourself at somewhat of a dead-end, did you, at the start, foresee a time-frame and a path of progress? Is there a particular point at which you’ve found yourself going astray? Have your values changed? What has triggered your urge to escape?

If you’re thinking about starting a project, perhaps list your aims, aspirations, goals and a time-frame; document your progress so you can see if you are indeed following the same path you originally set out on, or falling prey to the Sunk Cost Fallacy.

While there are those times above (and others) where I’ve simply quit things, and doing so may have served me well, there are certainly times where doing so has not, or it has got me off that thing but led me on to something else that fills the gap left behind. Therefore quitting something should perhaps not be taken lightly, even if it’s something harmful; ask yourself what that thing is doing for you (like, Facebook might be giving you that much-needed connection with others, but doing without it would mean lacking a connection with others, so what can you do instead to make up for that deficit?) If there is something in your life that you have the urge to give up that isn’t necessarily causing you harm (beyond perhaps some anxiety) then perhaps actively give yourself some time out (a week or a month, or three), and see how you feel at the end of that period. I would recommend keeping a journal or some other record of your “progress” or feelings along the way so you have a more rational measure that you can look back on.

What experiences with the Sunk Cost Fallacy have you had?

4 comments

  1. Our son tells me that using my Nectar card in Sainsbury’s, or possibly shopping there because I get points on it, is an example of the Sunk Cost Fallacy. My personal opinion, although I’ve stopped using it completely now, is that there will be a slightly larger profit margin on goods on average in the supermarket because it uses the Nectar scheme and therefore that it’s prudent to gain and use the points.

    I suppose what I’d say about cars and other big lumps of technology, or perhaps little gadgets, is that one abhors waste, and whereas it may be more expensive to keep it running, the embodied energy in that artifact means there’s an environmental cost in disposing of and replacing it. Then again, there will be diminishing returns there too.

    Just on the subject of blogging and other online activities, one or two of my YouTube channels were set up with the aim of monetisation and gaining an audience, and were abject failures in that respect. The most successful one, I seem to remember, has about a million and a half to two million views. I haven’t made a penny from it and they’re all long since abandoned. The blogs are slightly different. I have three or four. One of them was set up to support home ed and herbalism as personal businesses as well as for information, and they were supposed to work as a kind of shop front. Some of the YouTube content is like that too. Another is about gender issues and tends to perform pretty well, but I hardly ever use it. The one I pay most attention to is ‘A Box Of Chocolates’, and has a somewhat different role which has no connection to wanting an audience. I do it for two reasons:

    1. I don’t like posting walls of text in comment threads and other places online, such as on FB or Yahoo Answers, so instead of doing that I sometimes write a kind of model reply on the blog and link to it.

    2. I actually can’t stop writing. I stopped counting the number of notebooks I’d filled when it reached three hundred some time in my pre-teen years and my output hasn’t slowed since then. What I’m trying to do is dump the contents of my brain somewhere in such a way that it provides a kind of satisfying mental “clunk” in the hope that it will clear my mind and enable me to get on with something more important, whatever that is (I usually have no idea). Unfortunately it doesn’t work that way. The recent surge in blog posts is actually me procrastinating because I have a publishing deadline to meet and I’m blogging that instead. I hardly care whether anyone reads it. It seems to feed the urge to write, unfortunately, so it’s more an unhealthy addiction.

    • I have a Co-Op card and they give me vouchers every so often, typically for 50p off something. I can imagine them putting the price up by, say, 25p and then making their money back (if not more) from the people buying the item without the voucher. Also I recognise the ‘urge’ I have to make use of the voucher, especially since they expire within a week. I have to remind myself “it’s only 50p” and not worth the hour-round-trip just to make use of that.

      Your point about the disposal cost of ‘big lumps of tech’ reminds me of the “diesel scrappage scheme” and the tales I heard of people buying a new car only to find them riddled with issues, often related to the excessive tech now found in such cars, compared to their old and reliable vehicle.

      I can relate to your point (1) about posting to your own space instead of ‘posting walls of text’ in someone else’s. I certainly do this. Although I am amused that you made this point in such a lengthy comment!

      And (2), wow 300 notebooks! I remember going through a phase of creating vast To Do lists of topics I wanted to write about or research further; it was almost never ending and eventually I calmed down when it sunk in that I was never going to address everything. In fact the lists were probably so overwhelming they had the opposite effect on my overall output. I find that with my journalling it helps me avoid posting “stuff” that I just need to get off my chest to move on.

      And… I can totally relate to the deadline-avoiding tactics; the procrastination. It’s actually a thing, like going around tidying and cleaning when there is something pressing to do. Although it has been said that it can help to get things in order around us first.

  2. Interesting post. I tend to move from project to project, dropping old ones to make room for the new. But like Zerothly, I’ve always written things, and hope it will continue. Blogging is just a manifestation of that.

    • I think it has been helpful for me to accept the moving from project to project tendency. I now put things on the back-burner to see if interest returns, and if not, I let them go. But there is a trade-off between this and having the pleasure in a long-term project, although we cant always predict which interests will stick around.

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