The sunk cost fallacy comes from hanging to a plan that is already put in motion, a plan that you constructed in your mind, purchased for and are in the process of implementing. The error is in conflating unrelated things through processing them as parts of one mental entity, and thus valuing some of them too highly.
When you take an outside view, you are using the strength of your mind in processing representative pick of evidence. You can see what to expect by constructing a valid model, as opposed to taking in anecdotal evidence that misleads your mind.
The difference between these modes of thinking is in appealing to weaknesses and strengths of human brain, in finding the right answers. This is the difference that determines the failure in the first case, and relative success in the second.
However, even the power of outside view is rather limited. You are hiding valid evidence from your mind, lest it be misled. In many cases, there are ways of finding more, perhaps presenting the conclusions to another outside look.
If you decided to be a perfect employee, perhaps resolved to be a cooperatator in one-off cooperation scenario, this is private info about you that may be practically impossible to signal. In the statistics you present to the judgment from the outside view, this info is absent. Does your resolve, or mental clarity, make a difference? How to predict that? There is no fully general answer, you’d have to work on each specific case. But there is also no fundamental conflict.
The sunk cost fallacy comes from hanging to a plan that is already put in motion, a plan that you constructed in your mind, purchased for and are in the process of implementing. The error is in conflating unrelated things through processing them as parts of one mental entity, and thus valuing some of them too highly.
When you take an outside view, you are using the strength of your mind in processing representative pick of evidence. You can see what to expect by constructing a valid model, as opposed to taking in anecdotal evidence that misleads your mind.
The difference between these modes of thinking is in appealing to weaknesses and strengths of human brain, in finding the right answers. This is the difference that determines the failure in the first case, and relative success in the second.
However, even the power of outside view is rather limited. You are hiding valid evidence from your mind, lest it be misled. In many cases, there are ways of finding more, perhaps presenting the conclusions to another outside look.
If you decided to be a perfect employee, perhaps resolved to be a cooperatator in one-off cooperation scenario, this is private info about you that may be practically impossible to signal. In the statistics you present to the judgment from the outside view, this info is absent. Does your resolve, or mental clarity, make a difference? How to predict that? There is no fully general answer, you’d have to work on each specific case. But there is also no fundamental conflict.