Current Events > A lot of people's lives would be better if they understood the sunk cost fallacy

(+) Yeah! (+)

Like my brother, who can't avoid a bargain so his house is full of all this shit that he will never sell and never use. Meanwhile his credit card debt is out of control.

Hell my life is better just thinking about it consciously, because I still fall prey to it. Life is a lot simpler when you're prepared to walk away from shit that isn't going anywhere.
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It's like buying food in bulk when you're single.
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What does any of this have to do with sunk costs?

Annihilated posted...

What does any of this have to do with sunk costs?

All of it. When you see a deal that you "just can't pass up on" so you buy some useless bullshit out of a misguided feeling of FOMU, that's sunk cost fallacy. There's a perceived need to avert loss that is totally imaginary.
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I thought sunk cost was putting money into something, it not getting results, then you throwing more money in it because you feel youve already put too much into it despite the fact that its more logical to just cut your losses. This doesnt sound like sunk cost, this sounds like just being stupid with money.
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That...isn't what the sunk cost fallacy is. Sunk cost fallacy is when you say "I've already put so much money into this stupid business idea, I better keep putting money into it so I can eventually succeed."
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SaltyWet posted...

It's like buying food in bulk when you're single.

I actually lived on a bulking diet off of $200 a month doing this at Sams Club. I only bought foods I would go through every month.
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FLUFFYGERM posted...

That...isn't what the sunk cost fallacy is. Sunk cost fallacy is when you say "I've already put so much money into this stupid business idea, I better keep putting money into it so I can eventually succeed."

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FLUFFYGERM posted...

That...isn't what the sunk cost fallacy is. Sunk cost fallacy is when you say "I've already put so much money into this stupid business idea, I better keep putting money into it so I can eventually succeed."

It would be if we're factoring time into the cost, which I was. If you're there and you see a deal, you think "I'm already here, I may as well buy it because I won't see a deal like this again".

Something my brother does a lot of is think he needs to buy something because he went out to the shops and didn't find what he was looking for.
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pinky0926 posted...

Annihilated posted...

What does any of this have to do with sunk costs?

All of it. When you see a deal that you "just can't pass up on" so you buy some useless bullshit out of a misguided feeling of FOMU, that's sunk cost fallacy. There's a perceived need to avert loss that is totally imaginary.

That's not what it is at all. Sunk costs are money you've already spent, not money that you "must" spend. The sunk cost fallacy is geared more towards an investment standpoint where you've already dropped X amount of money in something that's not really turning a profit, and rather than cut your losses and bail out, you double down because you figure "hey, I've already spent this much, if I stop now it will be a waste." That's why it's commonly used in gambling scenarios.

Annihilated posted...

pinky0926 posted...

Annihilated posted...

What does any of this have to do with sunk costs?

All of it. When you see a deal that you "just can't pass up on" so you buy some useless bullshit out of a misguided feeling of FOMU, that's sunk cost fallacy. There's a perceived need to avert loss that is totally imaginary.

That's not what it is at all. Sunk costs are money you've already spent, not money that you "must" spend. The sunk cost fallacy is geared more towards an investment standpoint where you've already dropped X amount of money in something that's not really turning a profit, and rather than cut your losses and bail out, you double down because you figure "hey, I've already spent this much, if I stop now it will be a waste." That's why it's commonly used in gambling scenarios.

Money is not the only measure of cost.
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Damn I thought TC was smarter than this for some reason

@pinky0926 stick to fashion topics plz
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FLUFFYGERM posted...

Damn I thought TC was smarter than this for some reason

@pinky0926 stick to fashion topics plz

Why is time already spent on a thing not a component of sunk cost? Explain please.

Hell this entire article uses the time spent farming in farmville as an example.

https://youarenotsosmart.com/2011/03/25/the-sunk-cost-fallacy/
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Forgettable posted...

Sunk cost is "I've already invested this much resource into this thing but I'm not getting what I want, maybe if I invest even more resources into it I'll eventually get it."

How is that not contained in the example I gave, lol

That is literally what drives my brother to buy all this shit when he sees it
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Forgettable posted...

Sunk cost is "I've already invested this much resource into this thing but I'm not getting what I want, maybe if I invest even more resources into it I'll eventually get it."

Yep. Done that with relationships too
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Newegg has MSI RX 580s 8GBs for $179 new, I'm so tempted to buy a few. Building yet another new mining rig wouldn't be a good idea at this time however.

pinky0926 posted...

FLUFFYGERM posted...

Damn I thought TC was smarter than this for some reason

@pinky0926 stick to fashion topics plz

Why is time already spent on a thing not a component of sunk cost? Explain please.

Hell this entire article uses the time spent farming in farmville as an example.

https://youarenotsosmart.com/2011/03/25/the-sunk-cost-fallacy/

Time itself can also be a sunk cost, but I still don't see how that relates to your example.

So it's like buying all these Steam games I would never ever touch?
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pinky0926 posted...

Forgettable posted...

Sunk cost is "I've already invested this much resource into this thing but I'm not getting what I want, maybe if I invest even more resources into it I'll eventually get it."

How is that not contained in the example I gave, lol

That is literally what drives my brother to buy all this shit when he sees it

I mean it's okay to say "Oh i must've been thinking about something else" instead of doubling down and trying to backpeddle after you've been corrected

none of your initial posts in this topic had anything to do with sunk cost fallacy tbqh
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Veggeta X posted...

So it's like buying all these Steam games I would never ever touch?

no
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FLUFFYGERM posted...

I mean it's okay to say "Oh i must've been thinking about something else" instead of doubling down and trying to backpeddle after you've been corrected

none of your initial posts in this topic had anything to do with sunk cost fallacy tbqh

No need to be rude about it, though. You can be well mannered while educating.
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FLUFFYGERM posted...

I mean it's okay to say "Oh i must've been thinking about something else" instead of doubling down and trying to backpeddle after you've been corrected

none of your initial posts in this topic had anything to do with sunk cost fallacy tbqh

I don't think it counts as backpeddling when you point out that the example doesn't fit the criteria and then I explain why the example fits the criteria. Yes, I didn't explain it well initially.
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pinky0926 posted...

Money is not the only measure of cost.

It's not just the need to avert a perceived loss though. It's putting more into something you've already taken a loss on in hope that you'll benefit eventually. A deal too good to pass on isn't a sunk cost because you haven't put anything into it. Your brother buying things and not selling them isn't a sunk cost because he has no delusion that he'll recoup his losses.

Note that the word money is not found here.
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How much credit card does your brother have? Are we talking maybe a thousand, or real money? Sounds worrying, possibly.

Also, sunk cost just means money you're spent and is gone forever, as I think several people have said. I'm not familiar with the sunk cost fallacy, though.

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The economy would tank if people started saving money instead of spending it on shit they don't need.

Serious Cat posted...

It's not just the need to avert a perceived loss though. It's putting more into something you've already taken a loss on in hope that you'll benefit eventually. A deal too good to pass on isn't a sunk cost because you haven't put anything into it. Your brother buying things and not selling them isn't a sunk cost because he has no delusion that he'll recoup his losses.

Note that the word money is not found here.

He does though. That's what I'm telling you; he'll drive out to an auction, spend 4 hours there and then in frustration buy something just because he already took the time and effort. The justification he gives is always that he'll just sell it, but he generally doesn't.

Anyway I'm not meaning to argue, I agree with your definition of it. The topic was really just to point out how people continue to invest in nonsense that is already hurting them with no payoff in sight, and everyone does it.
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Sunhawk posted...

Also, sunk cost just means money you're spent and is gone forever, as I think several people have said.

It's a resource expended in hope of receiving some sort of benefit that hasn't materialized. The fallacy is that you'll make your losses back by dumping more resources into it.
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Forgettable posted...

How? It seems less like sunk cost and more like giving himself a consolation prize in your story.

Drives out to an auction - spends hours there, uses up gas. He'd be better to cut his losses and run but instead he'll pick up some shit because he's already there. I don't know if that's a consolation prize really.
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Gambler's fallacy
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pinky0926 posted...

The justification he gives is always that he'll just sell it, but he generally doesn't.

Then it's not a sunk cost. It's just your brother not selling it.
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Serious Cat posted...

pinky0926 posted...

The justification he gives is always that he'll just sell it, but he generally doesn't.

Then it's not a sunk cost. It's just your brother not selling it.

It would be if he bought it as an investment opportunity. I can't imagine why he'd need another lawnmower otherwise.
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pinky0926 posted...

It would be if he bought it as an investment opportunity. I can't imagine why he'd need another lawnmower otherwise.

It's not even a sunk cost given that he still has an asset that still has a value, let alone an example of the fallacy.
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Serious Cat posted...

pinky0926 posted...

The justification he gives is always that he'll just sell it, but he generally doesn't.

Then it's not a sunk cost. It's just your brother not selling it.

If he only buys something because he's already invested time and effort into getting to the auction. That is the sunk cost fallacy.
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Here's an example of how sunk cost can be used for time.

Say you get to a place with good food and there's a big line. You get a third of the way through the line and it starts pouring. Outside line, no umbrella. You look across the street and there's a place with not as good food, but no line. Sunk cost fallacy would be thinking "I've already spent ten minutes in line, I should just wait it out" rather than saying fuck it, I don't want to be soaked and miserable and writing off the ten minutes.

FLUFFYGERM posted...

pinky0926 posted...

Forgettable posted...

Sunk cost is "I've already invested this much resource into this thing but I'm not getting what I want, maybe if I invest even more resources into it I'll eventually get it."

How is that not contained in the example I gave, lol

That is literally what drives my brother to buy all this shit when he sees it

I mean it's okay to say "Oh i must've been thinking about something else" instead of doubling down and trying to backpeddle after you've been corrected

none of your initial posts in this topic had anything to do with sunk cost fallacy tbqh

So is his doubling down on his definition a... sunk cost?

I'll show myself out
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SpinKirby posted...

Gambler's fallacy

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I know you haven't said how much debt he's in, but if it's only a little, who gives a fuck?

Plus, he's an adult. He can make his own (bad) choices.

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BWing posted...

Here's an example of how sunk cost can be used for time.

Say you get to a place with good food and there's a big line. You get a third of the way through the line and it starts pouring. Outside line, no umbrella. You look across the street and there's a place with not as good food, but no line. Sunk cost fallacy would be thinking "I've already spent ten minutes in line, I should just wait it out" rather than saying fuck it, I don't want to be soaked and miserable and writing off the ten minutes.

No, because the restaurant you're queuing for has better food.

Here's a better example:
Say you get to a place with good food and there's a big line. You get a third of the way through the line and it starts pouring. Outside line, no umbrella. You look across the street and there's a place with as good food, but a longer line, with shelter from the rain. Sunk cost fallacy would be thinking "I've already spent ten minutes in line, I should just wait it out" rather than saying fuck it, I don't want to be soaked and miserable and writing off the ten minutes.
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EpicMickeyDrew posted...

BWing posted...

Here's an example of how sunk cost can be used for time.

Say you get to a place with good food and there's a big line. You get a third of the way through the line and it starts pouring. Outside line, no umbrella. You look across the street and there's a place with not as good food, but no line. Sunk cost fallacy would be thinking "I've already spent ten minutes in line, I should just wait it out" rather than saying fuck it, I don't want to be soaked and miserable and writing off the ten minutes.

No, because the restaurant you're queuing for has better food.

Here's a better example:
Say you get to a place with good food and there's a big line. You get a third of the way through the line and it starts pouring. Outside line, no umbrella. You look across the street and there's a place with as good food, but a longer line, with shelter from the rain. Sunk cost fallacy would be thinking "I've already spent ten minutes in line, I should just wait it out" rather than saying fuck it, I don't want to be soaked and miserable and writing off the ten minutes.

You took it too far.

Waiting in line 2 hours for a ride.

Someone walks by and says that was a shitty 3 minute ride.

Sunk Cost is continuing to wait after hearing that and searching the review online.
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SpinKirby posted...

EpicMickeyDrew posted...

BWing posted...

Here's an example of how sunk cost can be used for time.

Say you get to a place with good food and there's a big line. You get a third of the way through the line and it starts pouring. Outside line, no umbrella. You look across the street and there's a place with not as good food, but no line. Sunk cost fallacy would be thinking "I've already spent ten minutes in line, I should just wait it out" rather than saying fuck it, I don't want to be soaked and miserable and writing off the ten minutes.

No, because the restaurant you're queuing for has better food.

Here's a better example:
Say you get to a place with good food and there's a big line. You get a third of the way through the line and it starts pouring. Outside line, no umbrella. You look across the street and there's a place with as good food, but a longer line, with shelter from the rain. Sunk cost fallacy would be thinking "I've already spent ten minutes in line, I should just wait it out" rather than saying fuck it, I don't want to be soaked and miserable and writing off the ten minutes.

You took it too far.

Waiting in line 2 hours for a ride.

Someone walks by and says that was a shitty 3 minute ride.

Sunk Cost is continuing to wait after hearing that and searching the review online.

How did I take it too far? You took it too far, that's not sunk cost, that's just not basing you're decision making from one random person's opinion.
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EpicMickeyDrew posted...

SpinKirby posted...

EpicMickeyDrew posted...

BWing posted...

Here's an example of how sunk cost can be used for time.

Say you get to a place with good food and there's a big line. You get a third of the way through the line and it starts pouring. Outside line, no umbrella. You look across the street and there's a place with not as good food, but no line. Sunk cost fallacy would be thinking "I've already spent ten minutes in line, I should just wait it out" rather than saying fuck it, I don't want to be soaked and miserable and writing off the ten minutes.

No, because the restaurant you're queuing for has better food.

Here's a better example:
Say you get to a place with good food and there's a big line. You get a third of the way through the line and it starts pouring. Outside line, no umbrella. You look across the street and there's a place with as good food, but a longer line, with shelter from the rain. Sunk cost fallacy would be thinking "I've already spent ten minutes in line, I should just wait it out" rather than saying fuck it, I don't want to be soaked and miserable and writing off the ten minutes.

You took it too far.

Waiting in line 2 hours for a ride.

Someone walks by and says that was a shitty 3 minute ride.

Sunk Cost is continuing to wait after hearing that and searching the review online.

How did I take it too far? You took it too far, that's not sunk cost, that's just not basing you're decision making from one random person's opinion.

>and searching the review online.

That's the whole point of sunk cost, my dude. After the experience is determined as not worth it, you don't continue just for the sake of it.

This is a real story, btw.

https://www.tripadvisor.com/ShowUserReviews-g34515-d102432-r578397690-Universal_Studios_Florida-Orlando_Florida.html
http://orlparkpass.com/2018/04/review-fast-and-furious-supercharged-at-universal-orlando/

I waited like 30 minutes for this stupid fucking ride, and it wasn't worth it.

There were people who waited 2 hours LMAO.
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You're the one that fucked up your example by adding rain to the mix.

If it had been something like, "you search up the menu and they have nothing you like on it", then it would be perfect.

Like Hell anyone wants to tank rain for random ass food.
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SpinKirby posted...

Like Hell anyone wants to tank rain for random ass food. In your scenario, the end game isn't even known.
There places in New York that I wouldn't give up my spot rain or shine, but there's a 0% chance Im going to wait in the rain for Five Guys.

That's why the restaurants have equal quality food in my scenario. So the choice is stay in the rain because you've spent ten minutes in this line (sunk cost), or lose the ten minutes but get out of the rain, and wait in line for equally as good food in shelter. Sunk cost isn't just what's on the menu.
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Pinky you have been making some weird-ass topics that don't make any sense lately
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EpicMickeyDrew posted...

SpinKirby posted...

Like Hell anyone wants to tank rain for random ass food. In your scenario, the end game isn't even known.
There places in New York that I wouldn't give up my spot rain or shine, but there's a 0% chance Im going to wait in the rain for Five Guys.

That's why the restaurants have equal quality food in my scenario. So the choice is stay in the rain because you've spent ten minutes in this line (sunk cost), or lose the ten minutes but get out of the rain, and wait in line for equally as good food in shelter. Sunk cost isn't just what's on the menu.

Yeah, it's about the entire experience.

But seriously.

Stay away from the Fast & Furious ride at Universal.

STEER THE FUCK CLEAR OF IT.
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SpinKirby posted...

>and searching the review online.

oh ok, the way you worded it it sounded like sunk cost is looking up the review online.
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There was never a more epic flopic