The 'Sunk Cost Fallacy' with Julia Galef. #shorts

Game theory is a useful tool for decision-making in situations where the outcome depends on multiple parties. It provides a systematic way to analyze the interdependence of individuals or organizations and their potential strategies.

Not only does game theory help you identify the optimal strategy for achieving your goals, it can also help you avoid the sunk-cost fallacy — the tendency to persist in an endeavor because of the resources you've already invested.

By taking into account the potential actions and responses of other players, game theory allows you to minimize your losses and make informed choices that lead to better outcomes. Whether you're negotiating a business deal or making investment decisions, game theory can be a valuable asset in helping you make smarter choices and achieve your objectives.

[JosephSchneider]

I knew what the sunk cost fallacy was, but I had already clicked on the video and watched 10 seconds of it. So I could at least finish the video 🤷🏼‍♂️

[ReadingRambo]

"Don't cling to a mistake just because you spent a lot of time making it."

[danpalchak]

This fallacy is one reason toxic relationships last for so much longer than they should.
“I’ve already given them so much time and effort, it would be crazy just to throw all that away”

[quitlife]

There's a quote I like: "when you're going in the wrong direction; stopping, is moving forward."

[BBQDad]

After decades of work as a strategic management consultant, I can affirm that managers will make decisions on the basis of sunk costs no matter how carefully the error is explained to them.

[danzigvssartre]

Speaking from experience as a therapist, the "sunk cost fallacy" plays a massive part in gambling addiction.

[duker]

Sunk Cost Fallacy is the reason I watched so much of The Walking Dead before quitting..

[zimmejoc]

If you ignored the sunk costs, nobody would ever finish a doctoral program.

[lawrenceehrbar]

Overheard at a funeral; "Did the deceased leave much behind?" The whispered reply; "Word has it that he left it all."

[alex_yates]

"don't throw good money after bad" is a phrase that springs to mind

[Kenjiro]

Cutting losses is something that should be actively taught.

[GreenDistantStar]

Sunk cost fallacy only works if the desired outcome is not fully known. The counter argument is the hand-pump argument. You're hand-pumping water, but no water emerges, though it has before. Do you quit now, or keep pumping? The water may flow on the next pump, and walking away when you were so close would indeed be wasted effort. If you knew the bore was dry, or the shop was closed, then it would be irrational to continue.

[irismckay]

I once had a boyfriend who insisted we stay for the second half of a horrible theater performance because he'd paid so much for it, even though we both hated it!

[mosotheshowstarta]

In business school my professor summerized it simply as "fail early and fail cheap"

[tommasomarinelli]

i like the way she speechs, she pauses instead of it's remarkable

[ebrennie]

When I left my ex, he said, “So you’re just going to throw away five years? Just like that?” He was all up in the sunk cost fallacy headspace, and seemed to fail to consider how we got there: he’d been throwing me away from day 1.

Having awareness of the sunk cost fallacy is exactly why I left. He was an alcoholic who didn’t see he had a problem. Nothing was gonna change. I’d already lost 5 years. Wasn’t about to lose anymore.

[brycejohansen]

The thing about a sunk cost fallacy is you don't always know that the store is still open or not. The problem comes from using the cost as a justification to continue rather than other external factors. It doesn't mean you should outright stop because you haven't reached the goal yet.

[jordanm.]

“Quit: The Power of Knowing When to Walk Away” by Annie Duke is a great read for anyone interested in breaking down the human psyche in regard to the sunk cost fallacy. Helped me realize I need to leave a dead end job.

[nrogersii]

This is a misrepresentation of the sunk cost concept. Sunk cost is NOT making a choice to not waste what you have spent. It is based on making a decision based only on further cost vs the outcome of the additional efforts. Based on sunk cost, you would still turn around because walking an additional 10 blocks gets you no profit.

[biopsiesbeanieboos]

This fallacy is actually harder to identify than you might think. There are so many reasons we as humans do things that aren’t necessarily dependent on one particular outcome. In your example, the person walking to the store may also enjoy the walk as a form of daily exercise, the opportunity to socialise, check the latest store window features, and some free wifi. Maybe they used to walk this route every as a child on a Wednesday so doing it holds some sentimental significance. All of those benefits are still available even though the store is closed. What at first may appear as sunk cost fallacy is actually rarely the case where humans are involved. Yes the principle is valid, but difficult to isolate in the complex arena that is the human mind.