Sunk Cost Fallacy - Mind Trap

According to research we make an average of 35.000 decisions every day. If your bedtime rhythm is in order, that will account for approximately 2200 decisions every hour. Luckily most of these are automated. We brush our teeth after we wake up, we eat a slice of bread, enjoy a coffee or opt for healthy and ride our bike to work. These decisions are usually not extremely meaningful individually.

Some decisions however, are more heavy and impactful. And when the time comes to make decisions like these, you might stumble upon a thought trap known as the sunk cost fallacy.

What is it

So what is the sunk cost fallacity? We as humans are emotional beings. Our decisions are not purely rational. This is why we might trick ourselves into making decisions that are loss aversive.

For example a student might decide to continue college because they have already completed their freshmen year, even though deep down they already know this is not "it". Or you might continue a relationship because together you share so many friends and memories.

It also happens on a smaller scale. Imagine buying tickets to a concert. You woke up early, got in line, paid a healthy chunk and managed to heroically finally score those front-row seats to your favorite artist. Unfortunately faith strikes and when the time comes, half a year later... you find yourself feeling ill. Will you still go? After all, you have already invested so much to get there.

Impact on health

Sunk cost fallacy is hard to avoid. When you feel unhappy with your choices this might be sunk cost fallacy rearing its ugly head. Have you recently invested your time and effort into things that no longer bring you happiness? Or are you dreading making that big decision even though deep down you know the answer already? Don't let it eat you from the inside. It's normal and common to make decisions based on earlier investments. But don't let it control your life or let it make automated decisions on your behalf.

Self-correction

Sunk cost fallacy occurs when you let past decisions take a front seat in future decision making. Here are a few pointers to help you tone down the effects of this thought trap.

While making a big decision try to consider the sunk cost fallacy. Consider noting any biases that might impact your decision. Ask yourself: "What would I do if I came in fresh and had to make this decision today?".

For smaller choices try to make a snap decision and immediately consider how it makes you feel. Does the decision bring you relief and happiness? Sunk cost fallacy grows stronger the longer we overthink.

It's almost impossible to completely remove sunk cost fallacity from your life, but we can make our decisions more thoughtfully. And it all starts by following this one small thing: Focus on where you want to go—your North Star—instead of what you’ve already spent along the way.