The sunk cost fallacy implies that we are making illogical judgments that result in inferior consequences. This was the most intriguing fact about the reading for me. We are preoccupied with our previous investments rather than our current and future costs and rewards, which leads us to deal with situations that are no longer in our best interests. I find that fact that the sunk cost fallacy is a vicious loop in which we continue to invest money, time, and effort in ventures in which we have already invested in most interesting (McRaney, 2011). The more we spend, the more dedicated we feel to continue the attempt, and the more assets we are likely to devote to carrying out our choice.
I have experienced this fallacy when I was buying a trip ticket when traveling. There were cheap and expensive options, but I purchased the expensive one because I thought it would be better option as it is expensive. Now after reading the piece, I realize that this was a fallacy and it made me rethink my choices. It seems that if I know about this fallacy, I will choose the cheaper option as there are no real differences between the options. In the case of sunk cost fallacy in my life, I would analyze the situation from different perspectives and think about decisions twice, not being blinded by this fallacy.
While it is difficult to overcome innate cognitive errors, we may strive to avoid the sunk cost fallacy by concentrating on present and future expenses and rewards rather than previous commitments. We should focus on actual activities rather than the sense of wastefulness or guilt that comes with breaking a previous commitment, because studies have shown that when we are discouraged from making decisions based on our emotions, the impacts of the sunk cost fallacy are decreased. However, we find it difficult to disregard our emotions since they have such a strong effect on our decisions. Instead, we may use technology to assist us in making judgments.
McRaney, D. (2011). The Sunk Cost Fallacy. You Are Not So Smart.