Traps recessed costs: why people cling to the failed project
Forming / / December 19, 2019
In the 60s, Britain and France decided together to develop a super-fast airliner "Concord". Even before the release of the model ordered 16 airlines, but then everything changed. The aircraft became more passengers from the middle class, which is more important than the price of the ticket and not the flight speed. Yes, and the airplane became more expensive fuel. Super-fast, but very expensive flights become unnecessary, and airlines have decided not to buy "Concord".
But instead to terminate unprofitable project, the country continued to sponsor the development of aircraft and spent on it a lot more than originally planned. As a result, "Concord" did not become popular, and finished planes on the cheap sell two airlines which are under government control.
The case is so significant that there was even a termThe sunk cost and Concorde effects: Are humans less rational than lower animals? "Concord effect". This is a classic example of a trap recessed costs - cognitive distortionsThat makes us hold on to the loss-making projects.
What is a trap recessed costs
Traps recessed or sunk costs (sunk cost effect) - it is a feature of the psyche that makes us continue to invest money, time and effort in a losing cause. Most often it is referred to in relation to the economy and finance, but the trap works in any area of ββlife.
For example, when you understand clearly, you do not want to work in the specialty, but spend a few more years to get a useless degree. Or when years relations grew into frustration, but you still remains together.
This happens unconsciously: people are not looking for reasons to continue - the need to make it obvious to him. And the more resources invested, the harder it is to recognize the error and to stop in time.
Study themeπ§
- Trap of thinking that make you spend more
What are the reasons it occurs
There are several psychological mechanisms responsible for recessed trap costs.
Fear immediate loss
Most people fearProspect Theory: An Analysis of Decision under Risk losing what he has. People with ease risk in an effort to win something, but are very careful when they can lose their own. The pain of loss is always stronger and brighter than the pleasure of acquisition.
Imagine that you have invested millions in the development of steep apps. When the money has already been spent, it turns out that it is not even remotely similar to what you would like. Recognize this and stop working on it - then just throw in the trash million and experience a strong emotional pain of his loss.
Psyche protects us from the pain, forcing the hope that more one million will make the app better. In the future, you will lose two million, and it is twice as painful. But it will then (and there is a chance that it will not). You invest money and hope that everything will be fine. In any case, you have got to delay pain. Well done.
The desire to regain control
If we consider a trap recessed costs in terms of needs, there is nothing irrational. In humans, there is a strong needMotivational Reasons for Biased Decisions: The Sunk-Cost Effect's Instrumental Rationality control of their lives, feel that he is able to cope with the circumstances. And it forces people to fight for freedom, to maintain confidence in their abilities and strive to authorities - it is so you get more control.
A waste of money, time or other resources inhibits the need to feel competent and to control own life. Back time does not work, then the only way to regain control - not to recognize the loss ratio and continue to invest.
Thus you satisfy his need, while at the same time lose even more time and effort that ultimately failed.
Find out moreπ
- 7 signs that you are obsessed with control, and how to fight it
How not to fall into the trap
There are several ways to recognize a mistake recessed cost before it ends in disaster.
To focus on the present
The trap recessed often costsWho throws good money after bad? Action vs. state orientation moderates the sunk cost fallacy. get people tied to the past. If a person is focused on the present and future, it is easier to accept the loss and move on.
Assessment of the situation from the point of view of the presentMotivational Reasons for Biased Decisions: The Sunk-Cost Effect's Instrumental Rationality - an excellent practice, which is a bit like meditation. It is necessary to abandon the thoughts and memories, clear your mind and concentrate on the present moment. With this technique you can see the current state of affairs without unnecessary regrets about the past and make the right decision.
Submit that the decision to accept the other person
Another excellent technique, which gives immediate results. You need to ask yourself the question: "How the other person would have done in this situation?" Instead of "people" can substitute anything: a doctor, realtor, CEO, Mom. The main thing is that the decision is made by someone from the outside.
The fact that people have different take solutions for themselves and for others. When we do it for other people, we assess the situation more surfaceDifferential weighting in choice versus advice: I'll do this, you do that. Sometimes it gives better results than in-depth assessment of the situation in which no end get over all the pros and cons.
In addition, we rely less on feelings"I" Follow My Heart and "We" Rely on Reasons: The Impact of Self-Construal on Reliance on Feelings versus Reasons in Decision Making and not willing to take risksI can take the risk, but you should be safe: Self-other differences in situations involving physical safety. Therefore, taking a decision for another person, you'll see their mistakes and are more likely to be able to stop in time.
see alsoππ§
- The trap of thinking: why are we afraid of terrorist attacks, but crossing the road on red light
- 14 memory traps, which change our past and affect the future
- Pitfalls of perception: how the senses distort reality