Sunk Cost Fallacy

01/06/20

The “Sunk Cost Fallacy” came up in conversation on a podcast I listen to, The Dave Chang Show, with his guest David Epstein, the author of ‘Range: Why Generalists Triumph in a Specialized World’. I haven’t read the book, nor do I intend to, as I’ll be crazy busy with school work, but I am interested in the concept of sunk cost. The sunk cost fallacy is when “individuals continue a behavior or endeavor as a result of previously invested resources (time, money or effort). This fallacy, which is related to lose aversion and status quo bias, can also be viewed as bias resulting from an ongoing commitment.” Lately, I have been considering that my job as a truck driver, which I have had for the past 10 years is an example of this. The fact that I am temperamentally at odds with the work I have been doing drove me to apply at Portland State University in order to finish my bachelor’s degree (from credits almost 20 years old haha), and to try and cast myself into an entirely different career that has almost nothing to do with physical labor. Honestly, it has been kind of scary, and starting in on my second quarter, I still feel somewhat adrift, and don’t have any real, concrete career plans yet. I am looking at 2 years of study minimum to achieve a bachelor’s, though, so there isn’t any pressing need to choose… yet.

However, experiencing my job as a sunk cost is very real, and it causes me a lot of anxiety. I don’t exactly know how to walk away from it; the wage, the vacation time, and the comfort and familiarity of it (a doubled-edged sword, for sure.) Considering it causes me to go into a kind of mental paralytic state, as stepping forward into an unknown void is bound to do. It has afforded me a home, and a reasonable amount of money to support my family, and, the works not even that hard anymore. It’s rarer now, but some days are organizationally such a shit show, that I will go in and do literally nothing for my whole shift. I’ll essentially sit and read in my cab, or fuck-off for a 3 hour lunch. Oddly, but perhaps not surprisingly, much of this dynamic is why keeping the job has become untenable. But, the actual walking away from it part… It feels like I will have to figuratively lop off a whole part of myself, and it’s still hard, even though I am so, so positive that what will come to replace it will be of infinitely more value than work as transactional drudgery. If someone out there has gone through this before, reach out. I’d love to hear from you.

3 replies on “Sunk Cost Fallacy”

I love the sunk cost fallacy; it is one of my favorite ideas. It explains a lot about how people make decisions.
It is not clear to me that your job fits into the paradigm of the sunk cost fallacy. I see a sunk cost as something you stick with simply because it once had value, without regard to the fact that that value has since been lost or spent. To me it seems you’ve attained something that is still of tremendous current value, as you describe it’s benefits.
Awesome to hear you are finishing your degree!

Maybe I didn’t go far enough in explaining the costs of continuing to keep the job that I currently have. To be sure it is not a financial cost that I have in mind, but one of well-being, of use, and fulfillment. While perhaps not having been historically the case for me, I think that I have experienced a shift in perspective that has divorced earning good money from work and personal worth. I am not the first person to equate time spent at a job to a sunk cost. Indeed, if I hadn’t heard the idea first elsewhere, I’m not sure if I would have made this particular connection myself.

As an aside, I’m trying to develop a practice of writing something here everyday day in the hope that I will develop a better capacity to express ideas. There is a good chance that I failed at it in this post, but, I succeeded in my main goal of simply no getting something down for the day.

Great to hear from you! So far I’m earning a 4.0 back at school. Hopefully I can keep it up! It is simultaneously much easier academically than I remember, but also much more stressful due to all of life’s other stresses.

I think you explained it fine. I suppose I’m used to thinking of sunk costs in economic terms, so I gravitated towards focusing on those grounds, glossing over the other stuff you wrote. Jobs tend to be more of an emotional sunk cost, in that it’s hard to leave something you’ve invested so much of your life in, even if you’d rather be doing something else. I’ve always placed a lot of value in having a stable, established job, because of the security that provides, so when I think about the idea of changing what I do, the risk of losing that seems too high. But that’s my temperament, based on what I value. It seems very different for a lot of people.

I’m glad you are finding classes easy. In my experience as a professor, the (relatively
) older students are usually much more on top of things than the typical 18-22 year old. College classes really are mostly about being disciplined and mature enough to have a real plan for getting the work done—often kids at that stage of life just haven’t developed that yet.

I’m enjoying your posts—keep it up! Your writing is excellent.

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