The Sunk Cost Fallacy Examples and How They Silently Steal Happiness
What are some examples of the sunk cost fallacy? Are you negatively affected and don’t realize it? The sunk cost fallacy may be why we focus solely on past costs rather than present and future benefits.
The sunk cost fallacy examples are efficient when our behavior results from previously invested resources rather than present and future benefits.
The sunk cost fallacy is when we overeat until we are on the verge of becoming ill at an all-you-can-eat buffet. We believe we paid for it, but as a result, we do not enjoy it because we feel sick.
When our behavior results from previously invested resources rather than present and future benefits, the sunk cost fallacy may be in full effect. For example, the sunk cost fallacy occurs when we overeat at an all-you-can-eat buffet.
You believe you paid for it, but as a result, you did not enjoy it and felt ill from the overindulgence. Why do you think we stay in destructive relationships or continue in careers we hate?
In many cases, the sunk cost fallacy is at work. The thought of correcting unhappiness never even crosses our minds. We suffer year after year after year.
The false belief is that ending the pain now will waste what we have already sunk (invested) into a situation. Years of pain and suffering could easily be avoided by just realizing that stopping the bleeding now can result in a pain-free, more significant gain for the future.
Large retail stores always use examples of sunk cost fallacy against us. Buy one and get the other at half the price. You are already paying for it, and we believe we will lose out if we don’t get the other one for half price.
They are losing out on what? I don’t know. The retailer is doing us a favor. They did not trick us into buying two and paying more than the cost of the two.
The result of sunk cost fallacy examples is one reason our homes are filled with so much junk we don’t want or need. We buy it because we believe it makes sense.
Not because we want or need it. Sometimes, the minute we get home, we ask ourselves, “Why did I buy this”?
Sunk Cost Fallacy Examples and Survival
Memory and recall are some of the most excellent survival tools for human beings. This is known as Adaptive memory. Remembering where predators and food are more likely to be is highly beneficial to survival.
Those individuals who did not acquire that skill were disadvantaged and removed from the gene pool at higher rates.
As a result, human beings evolved more towards avoiding threats than maximizing opportunity. Regarding human evolution, a bird in the hand is worth more than two in the bush. Really?
The prospect of loss motivates us more than the possibility of gain. The sunk cost fallacy seems to be woven into our DNA. How many birds would have to be in the bush before we regularly risk running into Lions to gain the extra meals?
Are we more risk and loss-averse than reasonable? When factoring in any exchange, do we think more about what we have to lose than the possibility of enormous gain? That seems to be the case. Human beings tend not to treat loss and gain equally.
A loss is more painful and memorable than the joy of possible gain. Witnessing a tribe member being devoured by Lions was much more painful and unforgettable than years of feasting on meals the extra birds would provide.
The risk of loss aversion becomes real but can also be irrational.
For example, many who play The State Lottery only play when the Jackpot is at record highs. In their minds, winning a few million is not worth the risk of almost certainly losing a few dollars.
Most lottery players believe the gain must be greater than the loss to be worth the risk.
The odds of winning are the same whether the Jackpot is 2 million or 800 million. The odds of having to share the Jack Pot go up the more people play. That means the odds of having to share large Jack Pots go up.
This would yield fewer winnings for high jackpots, not more, as lottery players believe. A person living from paycheck to paycheck can use 20 million dollars just as much as they can use 800 million.
The numbers work out the same, but less adverse human beings don’t see it that way.
People living from paycheck to paycheck can use 20 million dollars just as much as they can use 800 million. The numbers work out the same, but less adverse human beings don’t see it that way.
The sunk loss fallacy works the same way in the human mind. The risk of loss past cost outweighs the possibility of gain and causes a person not to act more likely to ensure a loss.
Hoping a situation will get better is almost always a losing strategy.
Sunk Loss Fallacy May Be Stealing Your Happiness
We need to realize that once the anchor of the sunk loss fallacy is lifted, we can sail off into the sunset toward better results and more happiness. We try, and if what we try does not work, cut your losses and try something else.
To avoid the possibility of losing the past cost, we may consider continuing:
.
- Destructive relationships, personal and professional.
- To watch a terrible movie, play, or musical performance instead of ending the pain.
- A gym membership or similar obligation when it is not beneficial.
- A College major when you realize you would be happier studying something else.
- To do something to make another person happy, neglecting your happiness.
.
Do you allow the fear of losing past costs to pressure you to continue participating in a less-than-ideal situation? We may enable the sunk cost fallacy examples to steal our happiness in many ways.
Allowing that situation to exist creates unhappiness in our lives. The thought of the possibility of loss without attempting to correct it constantly lingers in our minds, which can negatively affect our ability to be happy.
On a larger scale, sunk cost fallacy examples can result in wars and allow us to support failed political policies.
Avoid The Negative Effects Of The Sunk Cost Fallacy
It may be time for a change when something is not going well. Change can be scary but is often necessary. Cutting losses for clearer skies is practical. When you feel the irrational fear of loss creeping in, slow down.
I like to practice what I call mindful breathing. It is my way of meditating.
I take a few slow, deep breaths and clear my mind of all negative thoughts and feelings. I usually silently count to 3 or 5. This helps me think more clearly and make decisions purely on merit.
Ask yourself a few questions to avoid letting the sunk cost fallacy paralyze you into inaction.
As a Minimalist, I ask myself many of these questions before purchasing.
.
- Would you make the same decision again? ( Get involved in a situation, relationship, or obligation)
- If it were lost, would I replace it?
- Would you miss it if it ended?
- If it ended, would I renew it?
- Am I happy with it?
- Can I improve upon it?
- Does it negatively affect my life?
- Does it add value to my life?
.
Depending on my answers to the questions, I feel more able to make a good decision. I am less likely to allow the sunk cost fallacy to keep me trapped in a poor decision or propel me into making a poor choice.
Has the sunk cost fallacy ever hurt your life? Have you realized other ways to combat the sunk loss fallacy? Please comment below.
>
.
