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LM: #354: The sunk costs fallacy is the unlocked gains reality
I’m skeptical of the sunk costs fallacy.
It goes like this: Imagine you’ve bought tickets to an outdoor concert. The night of the concert, it’s cold and rainy.
You reluctantly go to the concert. But if you hadn’t bought tickets, and your friend offered you one for free, you wouldn’t have gone.
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You only went because you had the “sunk costs,” but your preference if you hadn’t bought tickets reveals you didn’t want to go that badly.
I get the sense that the sunk costs fallacy is in itself a fallacy.
I submit: The unlocked gains reality.
The unlocked gains reality applies very well to creative projects. When you’re in the midst of a big project, it’s normal to consider quitting. I considered quitting my current book many times.
Yes, we’re reluctant to quit because we look back on all that work and don’t want it to go to “waste.” But we’re also reluctant to quit because we’ll never see any benefit until we get to an “unlock.”
You can’t sell your novel if you don’t publish. You can’t see if that reel takes off if you don’t post. In any creative project, you must reach some point before you can unlock the benefits.
You might choose to scale your project down to get to that unlock, but just because you have sunk costs doesn’t mean you’re foolish to persevere.
Like many things in economics and even behavioral economics, the theories expect us to know the future. It might not rain so much at the concert or with some preparation you might not be so cold, and you will likely enjoy it more than you imagine from the warmth of your home.
The same applies when you’re in the shit and want to quit. You can’t get the gains until you reach an unlock.
Aphorism: “People are no longer owned by a company but by something worse: the idea that they need to be employable.” —Nassim Taleb
Book: Predictably Irrational (Amazon) is a seminal work on the weird biases that shape our realities.
Best,
David
P.S. When you’re weighing whether this is “worth it,” you’re vulnerable to shiny object syndrome.
