Why The Sunk Cost Fallacy Is Misleading You

Ever gone to see a movie and within the first 15 minutes you can tell that it's going to be terrible? Let's just assume you said yes so that I can ask you the next question: did you leave, or stay and suffer through the terrible film?

Most people probably decided to stick it out and get their moneys worth - which is ridiculous when you think of it, because the money is already spent. It makes no difference if they watch the movie or not. 

This is the infamous sunk cost fallacy, where we feel falsely tied to our investment of time or money into something and thus are unable to make rational decisions about how we should treat it. 

Falling victim to Sunk Cost is like saying you're going to drink some spoiled milk to get your moneys worth. I love this example because, not only is it obviously irrational, it's also bad for you - which most sunk cost based decisions ultimately are. 

In this episode we discuss:

How to recognize when you might be falling victim to the sunk cost fallacyHow the music industry is just as guilty of making these bad decisions.Ways you can avoid falling into the Sunk Cost Fallacy trap!

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