The “sunk cost bias” - Deepstash

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A fear of regret can lock us into bad relationships, jobs and habits - here's how to break free

The “sunk cost bias”

When starting new projects, we tend to have high expectations of them doing well. We put a big amount of effort into them and even if see they don't go that well, we still choose not to opt-out. Instead, we hang on them longer, because we feel regret of leaving a project before it materializes.

We therefore fall into the trap of irrationally hanging on to it in order to avoid regret temporarily. 

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Status quo bias
Status quo bias

Status quo bias is when we prefer that our environment and situation should remain unchanged.

The bias has the most impact in the area of decision-making, as we tend to pre...

Common Explanations for Status Quo Bias

These explanations are all irrational for preferring the status quo:

  • Loss Aversion: When we make decisions, we weigh the potential for loss more heavily than the potential for gain.
  • Sunk Costs: We continue to invest resources like time, money, or effort into a specific endeavor just because we are already invested, not because it is the best choice.
  • Cognitive Dissonance: In decision-making, we an option as more valuable once we have chosen it. Considering an alternative can cause cognitive dissonance.
  • Mere Exposure Effect: It states that people prefer something they've been exposed to before.
  • Rationality vs. Irrationality: We may choose to keep our current situation because of the potential transition cost of switching to an alternative. It becomes irrational when we ignore choices that can improve a situation because we want to maintain the status quo.
Status Quo Bias examples
  • When offered several sandwich options, individuals often choose a sandwich they have eaten before.
  • In 1985, Coca Cola reformulated the original Coke flavor and started selling a "New Coke." Although blind taste tests found many consumers preferred New Coke, consumers continued to buy Coke Classic. New Coke was discontinued in 1992.
  • In political elections, the current candidate is more likely to win than the challenger.
Admitting Failure

Humans tend to blame mistakes on external events, circumstances and people. Admitting failure goes against our ego, as we think it exposes our incompetence, leading to potential loss of...

Destigmatizing Failure

Recognizing that failure is healthy and a normal consequence of working in a complex environment can help us look at failure as a learning process instead of dreading it. It also helps to let your failure(s) be out in the open, making them visible to yourself and others.

A public failure is a learning for all, as they learn to make errors and take ownership of their mistakes. Openly admitting your mistakes also sends out a strong message of your being courageous, humble and bold.

Admitting Errors 

Many mission-critical work environments report errors and mistakes on time. This is because the employees are allowed to commit and share mistakes, and report them without fearing that they will be sacked. This psychological safety is crucial to a healthy work environment.

It helps to know that failing is an inevitable part of our complicated working life, and aids our lifelong learning.

What we regret

The regrets that bother us the most involve failing to live up to our “ideal selves.” 

We’re not as bothered by the mistakes we’ve made or the things we ought to have done as w...

The theory of the 3 selves
  • The actual self is what a person believes to be now, based on current attributes and abilities. 
  • The ideal self is comprised of the attributes and abilities a person would like to possess one day— goals, hopes, and aspirations. 
  • The ought self is who someone believes they should have been according to their obligations and responsibilities.
Regretting what we don't do

People regret their inactions more than their actions in the long term.

  • A mistake makes you feel a great deal of regret, but you get over it quickly because you most likely can fix it.
  • You can’t fix what was never done in the first place. Inaction, the utter lack of trying, is what will truly haunt you.