Know When You Need To Pull The Plug
Basing our decision on what’s going to happen in the future and not what investments have been made in the past by treating every decision as a new one is indeed very difficult. It’s not a clear, straightforward choice.
The more our past investment, the harder it is to abandon it. Without realising what we have invested is already gone, we are not able to shift our mental frame from the “cost of moving on” to the “cost of not moving on.”
Sunk cost fallacy causes us to ignore the promise of a better experience in the future by making an attempt to negate a loss in the past. In other words, our past investments over influence our current decisions.
“Humans are bedeviled by the “sunk cost fallacy.” Having invested time or money in something, we are loath to leave it, because that would mean we had wasted our time or money, even though it is already gone”, says David Epstein in Range.
A new technological innovation can make many products unviable, but how many companies decide to forgo the past investments that impact their products in a huge way by considering future demands?
How easy is it for someone to give up on a career that makes them miserable after spending years trying to hone their skills in a particular field?
