Julia Galef: The Sunk Costs Fallacy

Julia Galef: The Sunk Costs Fallacy


So I want to introduce you to a concept known
as the sunk cost fallacy. Imagine that you’re going to the store and you’re halfway there
when you realize, “Oh wait, the store is actually closed today.” But you figure, “Well, I’ve
already come ten blocks. I might as well just go all the way to the store, you know, so
that my ten blocks of walking won’t have been wasted. Well, this is a transparently silly
way to reason and I doubt that any of us would actually go all the way to a store that we
knew was closed just because we’d already gone ten blocks. But this pattern of thinking is actually surprisingly
common in scenarios that are a little bit less obvious than the store example. So, say
you’re in a career and it’s becoming more and more clear to you that this isn’t actually
a fulfilling career for you. You’d probably be happier somewhere else. But you figure
I’ll just stick with it because I don’t want my past ten years of effort and time and money
to have been wasted. So the time and money and effort and whatever else you’ve already
spent is what we call the sunk cost. It’s gone no matter what you do going forward.
And now you’re just trying to decide given that I’ve already spent that money or time
or whatever, what choice is going to produce the best outcome for my future. And the sunk cost fallacy then means making
a choice not based on what outcome you think is going to be the best going forward but
instead based on a desire not to see your past investment go to waste. Once you start paying attention to the sunk
cost fallacy you’ll probably notice at least a few things that you would like to be doing
differently. And maybe those will be small scale things like, in my case, I now am much
more willing to just abandon a book if a hundred pages in I conclude that I’m not enjoying
it and I’m, you know, not getting any value out of it rather than trudging through the
remaining 200-300 pages of the book just because I don’t want, you know, my past investment
of a hundred pages, the time that I spent reading those hundred pages to go to waste. And you might notice some large things, too.
For example, I was in a Ph.D. program and started realizing, “Gee, this really isn’t
the field for me.” And you know, it’s a shame that I have spent the last several years preparing
for and working in this Ph.D. program but I genuinely predict going forward that I’d
be happier if I switched to another field. And sometimes it really does take time to
fully acknowledge to yourself that you don’t have any good reason to stick with the job
or Ph.D. or project that you’ve been working on so long because sunk costs are painful.
But at least having the sunk cost fallacy on your radar means that you have the opportunity
at least to push past that and make the choice that instead will lead to the better outcomes
for your future.

52 Comments

  1. Carlos Gabriel Hasbun Comandari says:

    Now the question is, how to determine whether what you have worked on for so long is a mistake or not?

  2. el xero says:

    Great content, really liked this one

  3. Ben Melindy says:

    At what point is this no longer a fallacy though? For example, let's say you spend the last 4 years getting a bachelor degree. You have to write just ONE more test when you realize "I don't like this field."

    I feel as though choosing abandon the degree is just utter idiocy. There is value in having a degree whether you enjoy it or not.

    The sunk cost fallacy only works when the benefit of backing out outweighs the benefit of following through.

  4. Jeffrey Wynkoop says:

    Hi Julia, Thanks a lot for your videos, I really like them!

  5. Mick Malkemus, MS says:

    Sexiest brain on the Internet.

  6. Leo Liu says:

    my heart sunk in loss when this video ended…

  7. Andres Villarreal says:

    More than a fallacy, I see this as a psychological tendency. We include the cost of having reached a strategy in the first place, and the cost of finding a new strategy once we have decided we don't like the first one. The problem is that we do it unconsciously, so we have little control over the outcome.

    I discovered that I buy always the same brand of equipment (for example, sound equipment) because of this reason. You know that your first buy was worse than expected over a long period, and you know that any other brand will probably fail in a totally unpredictable time, so the cost of trying several brands is significant, maybe even enormous. So, you develop an unconscious bonding with the first brand you bought, and only look for alternatives when something devastating happens. You might also spend more than the cost of the original equipment trying to repair or improve it, instead of just buying a new one of another brand.

  8. byron2521 says:

    Well, it is good to now know there is a name for it. I was in my 40s before I decided "you know what, my career is a waste of time and I hate it, I'm going back to school to teach in another field".

  9. qrpnxz says:

    I don't know, Julia. There have been many books I've changed my mind about completely in the last chapter, but I'll go ahead and stop reading, too, if there are several hundred pages left and it's that bad.

  10. j w says:

    I agree but I simply refer to this as cutting your losses short.

  11. Chuck Becker says:

    Jimmy Buffett, 1981, "It's my Job." That song radically changed my life for the better. As individuals, we have to have the introspection to understand what "happy" means to us. For me, "It's my Job" gave me an external validation that earning the respect of those who are respected, sticking to commitments, and making each investment of my life work toward the future was where I would find happiness. There were many times that I wasn't "happy" in my job, but looking back on the arc of my life, those sources of happiness I mentioned have more than made up for the brief period of unhappiness.

    Most people are not very wise about themselves. The message should be to first, get to really know yourself. Then, let that guide your decisions regarding course changes and sunk costs. Sometimes our apprehension about forfeiting sunk costs is simply our better, inner-self whisper wisdom in our ear.

  12. Mito Bekrijo says:

    another lying jooess, trying to wash our Brains with jootube-management "Lesson"..don't buy it, goys.

  13. coreycox2345 says:

    Is the store not open today? Can we do something about that twit down there shouting "Come to the store?"

  14. BLACK ALIEN MUSINGS says:

    That's a REALLY BAD ANALOGY! In high stakes sunk cost situations, people do not think they have a place to go back to. They can't just go home like in your analogy.

  15. Ernesto Garcia says:

    Tao: Perhaps it works to define your strategy [and actions] from "emptiniess"

  16. Joslyn Barton says:

    Great examples! Thank you for this post.

  17. Arun Kumar says:

    OK, so today people are paid to speak the obvious on TV and YouTube?

  18. John Fahariya says:

    Brilliant Thanks

  19. Sandy says:

    i would have never read a book if I had thought like you did. Sunk cost is much more deeper

  20. KFUPMer Omar Alzahrani says:

    my life was sunk cost until i see this women S:

  21. The Ultimate Reductionist says:

    The Sunken Cost Fallacy = The Delusion that the Status Quo is "sacred" = the mental illness of Conservatism
    = nothing but Republicunts & Demoturds in power instead of Greens, Transhumanists, Marxists, Anarchists, Libertarians, Communists in the USA

  22. Copyuyo says:

    what if you've said "till death do us part"?

  23. Vorundor says:

    Thank you for this video! I've been looking for an explanation of this beyond just economics to illustrate it to a friend in a dead end relationship and you are the ONLY one that puts it on a broader perspective. Thanks again! 🙂

  24. andeace23 says:

    easy with that truth there…ouch

  25. Matthew Bigelow says:

    Regarding the analogy of the walk to the store, I actually think that a drive to the store would have made more sense as a comparison. If you were walking, then walking all the way to the store would be a good way to get some exercise. If, on the other hand, you were driving, then making the trip there would be a waste of time and gasoline.

  26. 0vershade says:

    Nice. You just cracked why people stay in damaging relationships.

  27. Lucas Smith says:

    Thanks Julia

  28. Nasmr says:

    a LOT of people in video game market are well sunken into this sunk cost fallacy.

    Be it when they say you need to "just keep playing to get to the good parts!" if someone hates the game 6 hours in (Destiny/the division)

    Or a more subtle way of them investing a lot of money on pre orders or Kickstarter games that look more and more trash but defend it because of their investment (star citizen/ anthem)

    Its pretty rife and a bad situation with how many use this fallacy

  29. Windows Logo says:

    This kinda defines autism wtf.

  30. hisham anan says:

    you explain very well thank you

  31. Grandma Bones says:

    Or when you've been indoctrinated for over a decade to believe that we need a dangerous territorial gang of killers, thieves and liars that forces us to pay and obey them and you've been worshiping politician a, b, or c, but then you start to understand what 'government' is, factually: i.e. a group of men and women forcing other men and women to pay and obey them.

    Hopefully, Julia's last sentence steers you in the right direction regarding this very important issue and what to do about it.

  32. stachowi says:

    Sunk cost fallacy: amazon prime, costco membership, expensive razor, printer, apps for a mobile phone operation system… make someone invest in your system, so they have a hard time leaving. Think switching from Windows to Mac.

    Very closely tied to another bias: loss aversion.

  33. AceTrainerGreen says:

    I struggle with this a lot in my personal life.

  34. Lone Wolf says:

    The best course of action when you've walked ten blocks toward the store and realize it's closed, is to pick up a brick, complete the journey, and break into the store to make the trip worthwhile. Just kidding.

  35. ilkov says:

    I watched this video in the hope of being enlightened about the concept, but i still don"t get it. It seems to me it is a fallacy to consider this fallacy a fallacy.

    Clearly if you are able to exactly evaluate chances of success (e.g. the shop is closed, or stocks are going to fail) you can take right decisions. Nobody would walk to the store. But what if you need to evaluate chance of success? What if the store is open one sunday a month and you just to walk around the corner to see? Is it fallacy to keep amazon stocks after the bubble? People who sold at minimum was clearly victim of the "fallacy of sunk cost fallacy"

  36. RandomStuff says:

    Thank you, this video gave me the courage to finally dump my wife. It made me realize that spending 60years of my life with my (now ex)wife does not mean that I should let those years be a burden on my future happiness.

    Who cares if I am 90 years old and have no one else to support me. I now have the motivation to finally find a new life partner, sunk cost can go to hell.

  37. Abhinandan Chakraborty says:

    how is such a smart mind like that connected to such a beautiful face like that… oohh heyy, can I buy you a drink?

  38. Solve Everything says:

    Modern science makes me sick. Im starting to believe that maybe I shouldnt be listening to women at all. 🤔

  39. kyleisreallycool says:

    I'd sink my cost into her, if you know what I mean

  40. drrodopszin says:

    I have a university degree thanks to sunk cost fallacy. It took 8 years instead of 5, but I was like, well I have invested already a lot of time, I can't quit without having a paper…

  41. Jojje 3000 says:

    Failure is not time or cost wasted.

  42. Dan K says:

    Very common with unhealthy relationships, you are with the same asshole because you've been so many years with the same idiot

  43. mehfoos says:

    I liked this video. Her message was so effective that I stopped watching the video half way through because I understood what the concept was and didn't think it's rational to waste time just to see it to the end.

  44. Ferdinand Balita says:

    It's like playing League or Dota, you can't just quit because you think that you'll just waste the time and effort you put into grinding for several years.

  45. Sotiris kr says:

    It can however have useful applications, for example you can trick yourself into to doing things that are not as pleasant but you have just by making a small start.

  46. Acetyl says:

    Sunk costs is a heuristic, not a fallacy. Just like naturalness is a heuristic, not a fallacy.
    Most supposed fallacies are better described as heuristics.

  47. Recreate Regine says:

    This never happens to me because I don’t even leave the house

  48. Alan Smithee says:

    I would sink my fallacy deep in her mouth

  49. hdckdsadd says:

    sunk cost fallacy helped me t finish university and have a degree. and thank God for it/that because otherwise I would've worked at emptying septic tanks

  50. NeanderthalRetardo says:

    The opening scenario is a bad comparison because there's no endgame reward to walking the rest of the way to a closed shop, but sticking with a career you've already sunk cost into could at least bear rewards in the long run.

    That said, I don't really agree with careerism anyway.

  51. Dan Bev says:

    Pretty lady

  52. C. Blount says:

    This is how cults and pyramid schemes operate. They prey on these type of people.

  53. Jason is so proud of you says:

    An example of the sunk cost fallacy: skeppy in skeppy vs technology

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