billswift comments on Sunk Cost Fallacy - Less Wrong

30 Post author: Z_M_Davis 12 April 2009 05:30PM

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Comment author: anonym 12 April 2009 09:20:26PM 1 point [-]

There is a very nice discussion of the sunk cost fallacy in Rational Choice in an Uncertain World: The Psychology of Judgement and Decision Making. They make your first point there.

They also give an excellent way of re-framing the issue when arguing against honoring sunk costs: explain your position as "not forsaking a project or enterprise, but, rather, wisely refusing 'to throw good money after bad'" [42].

One other reason for honoring the sunk cost that I haven't seen mentioned is that it might much more strongly motivate you to improve your decision making in the future, thereby preventing many future costly mistakes. Again though, that's not really a case of honoring sunk costs, since staying at the movie turns out to be a net win, just not for the obvious reasons.

Comment author: billswift 12 April 2009 09:51:24PM *  0 points [-]

That was one of the places I have seen it. "Rational Choice in an Uncertain World" is an excellent text; it also has the benefit of being very readable, so it's good as a quick refresher for when you are doing more in depth study.