Quitting 3: Avoiding the Sunk Cost Fallacy

"Once I start a movie, I always finish it, even if I don't like it."

"The book really bogged down in the middle and kept getting worse, but I just couldn't bring myself to put it down because I always finish reading something I've started."

"The project wasn't going anywhere. In fact, things were probably getting worse, but I just couldn't quit given the time and energy I had already invested."

Ever heard someone say one of the statements above? Ever said something like it yourself? How many of us have been counseled and coached to finish what we started, even though all the signs aligned to suggest we were going nowhere but downhill? 

 Conventional wisdom is often expressed in the following ways: 

• Join a team--finish the season. 
• Take on a project--see it through to conclusion. 
• Help yourself to the buffet--finish what you put on your plate. 
• Make an investment in the stock market--hang in for the long haul.                           

The basic rationale  for continuing often sounds something like this: "I've already invested so much in this endeavor that I can't quit, turn back, waiver, or reconsider."

In other words, we base our decision to continue in a particular direction based on what we've already invested--as if we could recoup those resources--rather than on what we will lose if we continue a course of action.

In The Art of Thinking Clearly, Rolf Dobelli summarizes nearly 100 ways human beings embrace irrational thought to their own detriment. One of these ways involves something known as the "sunk cost fallacy," also known as the "Concord effect." Basically this involves the idea that we have a much more difficult time letting go of something in which we've invested a great deal of time, energy, love, or money because we believe "if we stop now it will all be for nothing." It's as if we believe we can somehow recover what we have lost if we continue. The problem is that future effort in a direction going nowhere is even less likely to produce a return on our investment, let alone recover what we've lost.

Dobelli acknowledges there are times when staying the course, is the right thing to do. The decision to continue, though, should be based on the likelihood of reward for future efforts, not on what we've already invested. He cites a number of examples where the "sunk cost fallacy" had a disastrous effect (e.g., the continuation of the Viet Nam War, the failure of the Concord airplane, and any number of ad campaigns or stock market investments).

The decisions you are making likely have much less gravity than a super-sonic airplane or a war, but they are important to you. The next time you're watching a movie that's a yawner, reading a book with a plot going nowhere, or involved in a project with a less than promising outcome, you might just call it quits. While you cannot regain what you've already invested, you can avoid wasting future precious resources on something showing little promise.

Thinking it's time to let go of a few more things,

Dr. Jennifer Baker

Quitting and the Little Red Hen

It probably says something about me that one of the stories I remember most from childhood is that of the Little Red Hen. As the story goes, a little red hen and some of her friends find some grains of wheat. 

"Who will help me plant these grains of wheat?" the Little Red Hen asks the lamb, the cat and the pig.

"Not I!" they all exclaim.

"Then I'll do it myself," she responds. And so she does.

The story continues like this as the Little Red Hen waters the wheat and tills the soil. Eventually she harvests the grain, grinds it into flour, and makes the flour into bread. At every juncture she invites her friends to participate. At every point, they decline until the smell of warm bread begins wafting from the kitchen. Then, of course, the friends happily offer to help eat the bread. 

Declining their offer, the Little Red Hen exclaims, "I shall eat it myself." And, according to the author, "So she did."

I'm fairly certain the book I read in childhood ended here, but a later version I found had a different ending suggesting that the next time the Little Red Hen found some kernels of wheat, her friends all pitched in with the tasks involved so that when the bread was finally ready, they made hot chocolate and shared the loaf among themselves.

Hmmm... I'm not sure how I feel about the later version. It sounds like the author of the updated version was more comfortable with stressing cooperation than consequences. Perhaps this says something about the world today compared to 50 years ago, but that's not the point of this post.

The thing that strikes me here is our propensity to stress perseverance in the face of every obstacle, lack of support and interference. We say this to ourselves and we emphasize it with our children. Consider, for instance, The Little Engine that Could.

In this story, the Little Blue Engine continues to tell himself, "I think I can--I think I can--I think I can ..." and through such positive self talk manages to pull the train full of toys over the mountain.

In The Little Red Caboose, a favorite of my son that I read so often I can almost recite it 30+ years later, the Little Red Caboose "holds tight to the tracks and keeps the train from slipping back down the mountain." Once again, perseverance and determination win the day. 

I'm not saying we should give up on these qualities -- not at all. Without persistence, dedication, sacrifice, and courage, many important achievements would not have occurred. Many of the accomplishments of the American Revolution and the Civil Rights Movement came about because courageous people persisted in the face of seemingly insurmountable odds. The same can be said about people like George Washington, Abraham Lincoln, and Mahatma Gandhi.

I am suggesting that because many of us have had a consistent message about the importance of persisting since early childhood, we find it hard to consider other possibilities. And, when we do leave a job, give up on an important project, or let go of a significant relationship we often feel like a failure. We don't experience it as a movement toward success.

Sometimes You Can't Bake the Bread
The truth of the matter is that sometimes, no matter how hard you try, you can't "bake the bread." The story of the Little Red Hen suggests an independent spirit and a get-things-done attitude are the essentials for success, but sometimes there is no wheat to bake. And, unlike The Little Engine that Could, there are times when you can't. You can't bring back a loved one. You can't resurrect a marriage. You can't save the business from bankruptcy. There are times and circumstances beyond our control. To keep trying, holding on, refusing to give up, creates more problems than it solves. Of course, we don't often tell those stories to our children, but we do experience them in real life. One might ask, what would the Little Red Hen have done had she not been able to bake bread? Might she have considered corn fritters or oatmeal muffins? There are other possibilities, but you don't see them when you doggedly pursue only one goal.

Opening up to Options
There's one more thing about the Little Red Hen we might want to consider. Why does she continue to hang out with these questionable "friends?" She continually asks for their assistance, giving them every opportunity to be part of her venture, and they continue to turn her down--rather rudely in fact.

Doesn't it make you wonder about her choice of companions? Why does she persist in returning to people who show her so little respect? Perhaps she doesn't have to quit on her bread-baking project, but she might reconsider who she is asking to help. The lamb, cat and pig haven't proven useful, but what about the dog, cow and goat? Surely there are more than three animals on the farm. But, of course, when we get stuck in a particular perspective, we often find it difficult to envision other options.

I'm thinking about writing a different ending to the Little Red Hen story. The old story says, "'So I'll do it myself.' And so she did."' 

The new story reads, "'So I'll ask someone else to help.' When she found some new friends, they did."'

Rewriting old scripts,

Dr. Jennifer Baker 

Quitting

When my Main Man suggested I read a book about quitting, I thought he might be trying to send me a not-so-subtle message.

"I'm not a quitter," I said. "I persist. I keep going. I don't give up."

"I know," he said, "that's why you need to read this book."

I started to read the book. I didn't like it very much. It seemed to run counter to much of what I believe about life, living and the importance of persistence. Maybe I just don't like to read things when I feel uncomfortable.

"Keep reading," he said. 

Because I'm not a quitter ... because I'm prone to persist ... I kept reading and/or listening. (Did I mention that I'm a big fan of audio books? This is one of those.)

I'm not quite through with the book, but I have read enough to have come to the place where I can say the authors, Peg Streep and Allan Bernstein, have some worthwhile things to say--things I need to remember which you also may find helpful. Here's a brief overview of some of the highlights.

• Being able to quit on pursuing some goals is essential to helping you move forward to reaching others. Another way to think about this is the way some of us wallow in failure or what's gone wrong. When we do this, we're stuck. We don't have the freedom we need to move on. According to Streep and Bernstein, "Failing without quitting diminishes the self and often incapacitates our ability to act. Without the ability to give up, most people will end up in a discouraging loop" (p. 4).

• The happiest and most successful people are those who are able to both persist and quit. They have the ability and wisdom to discern what is needed when.

• Quitting can be both a healthy and adaptive response when a goal cannot be achieved or life takes you in a direction you had not anticipated.

When I was in training to be a marriage and family therapist, one of my supervisors told me something I've found very useful. "If you want to help people," he said, "find out where they have a white-knuckled grip on what they think they need to be happy and help them loosen their grip." 

Notice, he didn't say, "Help them to identify other goals. Help them to find better strategies to reach their goals. Help them persist in the face of overwhelming odds." 

Rather, he indicated that sometimes, the very fact we are holding on to something so tightly our "knuckles are white" with the effort, we probably need to loosen up, let go ... consider quitting. I know that sounds terrifying to some. I'm not very fond of it myself, which is why I plan to write more on this subject next week.

Until then, I'd like to note that winter seems to finally be loosening it's grip on all of us. I'm glad and I hope you are too.

Loosening up,

Dr. Jennifer Baker