Today, we’re talking about quitting.
Specifically, is it better to quit or soldier on when you feel you can no longer be effective?
Show notes and links:
How the Sunk Cost Fallacy Applies to Love (NPR)
Full episode text
This is another one of those frustrating feelings – to know that what you’re doing may not achieve whatever goal or purpose you have, yet feel like you should keep going. Of course, depending on the situation, there are a number of factors that go into the decision of what to do. Yet it certainly seems that we all have stories of when we should have thrown in the towel, but didn’t.
There’s an idea called the sunk cost fallacy that suggests that the cost you’ve already paid into something influences your decision, even if it “shouldn’t” in a purely logical sense. Loss aversion, or our desire to make the most of the resources we have, will sometimes mean that we put more resources into something only because we’ve already invested into it. It could be an idea, a relationship, an educational path, or just an evening activity you’ve already purchased tickets for.
The challenge is that, in economics, sunk cost is just that – sunk. That cost, in many ways, no longer “matters” because it’s gone. You can see the idea in the saying “it’s throwing good money after bad.”
So what do you think is best, and in what situations? Commit and continue, even if the outcome looks bad, or throw in the towel and save yourself the future possible cost?