10 votes

The sunk cost fallacy

9 comments

  1. georgebcrawford
    Link
    Excellent and accessible read. While I know about the sunk cost fallacy, I fall prey to it constantly. I feel I can now abandon a Terry Pratchett book for the first time (second if you count Good...

    Excellent and accessible read. While I know about the sunk cost fallacy, I fall prey to it constantly.

    I feel I can now abandon a Terry Pratchett book for the first time (second if you count Good Omens).

    This year I’ve kept a spreadsheet of books read August has one entry! One! Sorry Sir Terry, the sunk cost fallacy has prevented me from reading others on my list.

    4 votes
  2. [3]
    vord
    Link
    With respect to the chocolate experiment, I'm wondering if the conclusion is off, at least for the 'math logic' part. When shifting the cost from 1 penny to free, it shifts the balance of the...

    With respect to the chocolate experiment, I'm wondering if the conclusion is off, at least for the 'math logic' part.

    When shifting the cost from 1 penny to free, it shifts the balance of the value equation. When they are free, you lose nothing.

    I might choose 1 Lindt for 15 cents over 15 kisses. But I'd definitely take 15 free kisses. The results might have been different if it went 20/5 to 19/4 instead of 15/1 to 14/0.

    3 votes
    1. [2]
      Pistos
      Link Parent
      I think the experiment was deliberately designed so that the second test had one of the items become free. That is, the "pain of loss" (paying anything at all, event 1 cent) was removed. If the...

      I think the experiment was deliberately designed so that the second test had one of the items become free. That is, the "pain of loss" (paying anything at all, event 1 cent) was removed. If the Kisses were not free in the second test, there'd still be the pain of loss -- both choices would have a pain of loss.

      2 votes
      1. vord
        Link Parent
        I understand that, but I don't understand exactly how it jives with 'pure mathmatical logic.' Given the 0 cost results in (theoretically) infinite supply, that dramatically shifts the value...

        I understand that, but I don't understand exactly how it jives with 'pure mathmatical logic.'

        Given the 0 cost results in (theoretically) infinite supply, that dramatically shifts the value equation.

        I'll pay $2 over $1 for quality junk food. I won't pay $1 over free.

        Works like that for things like video cards too, but in a different way. If I have $300 to spend on a card, and the $300 and the $400 cards both drop in price, I'll likely just choose the now-200 cards and be able to buy a new $300 card sooner later. But other people might splurge on the now-300 card for a better experience now.

        3 votes
  3. grungegun
    Link
    I think there's an implicit problem with a lot of these psychological 'irrationality' demonstrations. Take the one with the 100$ and the 50$ ski trip tickets. The article states that more than...

    I think there's an implicit problem with a lot of these psychological 'irrationality' demonstrations.

    Take the one with the 100$ and the 50$ ski trip tickets. The article states that more than half of people choose to go with the 100$ good one. The big issue here is that most people, when answering this question take experience into account. Intuitively, you know that quality scales with expense. They then let this override the researcher's claim that the 50$ trip is better. Thus, you don't get a result that's irrational, you get a line of questioning which is useless.

    If you think people understand implicitly that they should take the questions given them as being perfectly accurate, then bring up the trolley problem. I've talked to dozens of people about it. Unless they have had some sort of experience with philosophy/psych/math etc, the first answer is something along the lines of, I jam the trolley, I throw a branch in front of the trolley, I throw myself in front of the trolley. It's hard to convince people that there are no extra options, because normal conversation doesn't work that way. Scientific quizzing relies on no more and no less being said than is true. Conversation has loads of implicit thought, and psych articles which take these results at face value without further discussion about how the questions are placed seem to me to be a bit naive.

    Finally, it is conceivable that choosing the 100$ trolley trip is a successful example of a prisoner's dilemma. Consider a company which sells ski trips for 100$, then advertises better ones for 50$, then when the rational consumer goes to the 50$ trip, they use sell the 100$ trip again. However, if a large fraction of people chose the 100$ trip, they cost that company more than they would have otherwise. This example isn't particularly persuasive (to me anyway, I think my first reason - implied subtext is the main reason this go the response it did), but it's important to note that 'herds' may evolve or train behavior which is individually irrational, but beneficial to the group.

    Regardless of whether I convinced you, it's good to take a critical eye to modern pop psych, sine the basis of science and philosophy are critical investigation.

    3 votes
  4. [4]
    cfabbro
    (edited )
    Link
    Psychology is a scientific field not a humanities one, so I moved this to ~science. :) p.s. plz label this comment as offtopic, or even noise, so it doesn't distract from any on-topic conversation

    Psychology is a scientific field not a humanities one, so I moved this to ~science. :)

    p.s. plz label this comment as offtopic, or even noise, so it doesn't distract from any on-topic conversation

    5 votes
    1. mrbig
      (edited )
      Link Parent
      Yeah... informal fallacies are humanities (philosophy), but despite the title the article focuses on psychology.

      Yeah... informal fallacies are humanities (philosophy), but despite the title the article focuses on psychology.

      3 votes
    2. [2]
      Pistos
      Link Parent
      Thanks. I wasn't sure which of the two was more appropriate. Now I know, going forward.

      Thanks. I wasn't sure which of the two was more appropriate. Now I know, going forward.

      1 vote
      1. cfabbro
        Link Parent
        No worries. I even had to look it up myself at one point a few years ago, so you're not alone in confusing it as such. :P

        No worries. I even had to look it up myself at one point a few years ago, so you're not alone in confusing it as such. :P

        2 votes