We tend to use trivial examples to illustrate sunk costs, like deciding whether to go to the movies, or deciding whether to leave a restaurant if the food is bad, but there are important real world situations where these considerations matter. For example, many people are afraid to change careers mid stream because they are afraid that all their education and experience up to that point would be a waste of time. They’ve already spent thousands of dollars on a degree, or tens of thousands of dollars on a professional degree, and now they have to start over? But isn’t that better than being miserable for the rest of your career? You can’t get your tuition and your time back, but you can still make yourself happier.
We tend to use trivial examples to illustrate sunk costs, like deciding whether to go to the movies, or deciding whether to leave a restaurant if the food is bad, but there are important real world situations where these considerations matter. For example, many people are afraid to change careers mid stream because they are afraid that all their education and experience up to that point would be a waste of time. They’ve already spent thousands of dollars on a degree, or tens of thousands of dollars on a professional degree, and now they have to start over? But isn’t that better than being miserable for the rest of your career? You can’t get your tuition and your time back, but you can still make yourself happier.
And, of course, people can have sunk costs in belief—you don’t want to waste all that time you spent in church...