Skip to main content

The Psychological Side of Sunk Costs


Writing off any so-called sunk cost as immaterial to any present decision is equivalent to writing off a relationship, perhaps a marriage, as soon as it proves to be disadvantageous instead of recalling its history or perhaps imagining its future. In terms of sunk costs, the modern economist may easily dismiss those costs, especially in the modern economy, when expenses are facilitated by work which has become less laborious than in prior generations. 

If, for example, a laborer were to purchase a football ticket with an amount of cash earned from fifty days of hard labor, the economist may expect that laborer to go to relatively greater lengths, perhaps despite the winter storm of the season, than a counterpart who spent a fraction of his daily earnings, or perhaps a friend who benefited from a "free" ticket.  

This is, after all, representative of all of those days of painstaking work, a feature of life which may be long forgotten due to the relative ease with which incomes seem to be systematically generated without as much blood, sweat or tears. 

Much of the same could be said about the progressive abstraction of money such that its roots and the causes of wealth are increasingly misunderstood and markedly misrepresented. 

This may strike an observer as irrational, especially when the apparent risks seem irreconcilable with the perceived potential for rewards, but this may merely be the consequence of a difference between the observer's and actor's respective sensitivities to the prior experiences which enabled the option now afforded to said actor. 

This sensitivity, when forward-looking, often drives scrupulous savings and spending habits, and while these behaviors may strike the observer as irrational when compared with perceived risks, opportunity costs or even the actor's own present mental calculus, the value of prior work may be understated to accommodate a potentially-overstated or largely-unsubstantiated valuation of life. 

This is not to suggest that individuals are prudent to remain committed to those ends afforded them by past expense, but rather to recognize that some of those individuals are influenced by the recollection of the ferocity or duration of that work which enabled the option. 

In some capacity, merely satisfying the terms tacitly accepted upon the time of purchase is a way to pay homage to oneself and the work conducted for this end. 

Therefore, attendance at the game may not merely stand as a source of mere football-related entertainment but may rather become a hybrid between that and the former. 

The actor may then seem better off by foregoing the game to remain safely at home, or by avoiding the painstaking drive, but the perceived regret, stemming from a supposed diminution of the value of said previous work, may beset the perceived value of the former. 

Again, this may seem irrational while it's merely a specific case of expressed valuation on past time and labor relative to alternative actions or endeavors whose values fail to be expressed with as neat a price tag as the other.  

Comments

Popular posts from this blog

Death by Socialism

This title is available for purchase on Amazon ,  Lulu ,  Barnes & Noble , and Walmart .

Get Your Copy of “Death by Socialism” Today

Buy your copy of  Death by Socialism  today at  Lulu ,  Amazon ,  Barnes & Noble , or  Walmart .  Every year, there is a list of the world’s top causes of death. The list ordinarily includes heart disease, stroke, pulmonary disease, lung cancer, tuberculosis, and malaria, among others. However, there is one cause of death that is conspicuously absent from this list; one that has claimed more than one hundred million lives over the past century alone, and one that has left countless mil- lions of lives and families in shambles. You will not find this cause of death listed on any coroner’s reports. You will not find any laboratories researching a cure. There are no fundraisers or public awareness campaigns around it. You will not even find a passing mention of it in any of the newspapers. It is the most ruthless of serial killers, and yet it never has its day in court. More than people, this cause of death has claimed entire civilizations. It is the most silent of killers: it is Deat

Rally for Route 66!

Keep up the fight for the Mother Road! Rally for Route 66! There is a lot at stake in preserving this irreplaceable monument to American history, not merely as a tourist attraction but as a means to permitting a glimpse into our past, as a means to virtual time-travel into a time and space otherwise inaccessible, as a means to capturing the imaginations of future generations and to preserving the memory of our forbears in both form and spirit.  We are nothing without reverence for our forbears, without our heritage or our identity as a people, without the preserved memory of our history. Without these reminders, without the tangible connections to our past and the efforts which have forged our path and come to define us, without these monuments to the pioneering and the innovative, we are destined to forget all of that which makes us uniquely human, all of that which has afforded us so much insight and abundance, all of that which has given us pause to reflect and remember and to appre