I was listening to an economics lecture and heard about this fallacy. It one of the many foibles of human reasoning that shows how difficult it is for us to be rational — AKA “bounded rationality“.
Hopelessly investing further in a failed/irrational project or venture. No matter how much more is invested, it is clear that all is and will further continue to be lost. Yet the person caught in the “sunk-cost fallacy” can not seem to stop throwing away their investment. Colloquially called, “throwing good money after bad” or the “Concorde Fallacy” (see below).
The phenomena is thought to exist because the investor feels that the shame , embarrassment or disappointment of owing up to the failure is more painful than the further investments that keep being lost while putting off that negative emotion. It is as if you just keep digging yourself into a hole.
- Adolf Hitler (WWII) & Lyndon Johnson (Vietnam War) both kept throwing away the lives and resources of their people (and the enemy) even though they knew the war was lost.
- The Concorde, a supersonic transport jet, failed any market potential after a freak accident that killed 113 people but was not due to design flaw. The project got a bad name and was doomed. Yet France and England kept investing deeper and deeper on the grounds that they had already invested a lot of money.
- Continuing the cost of tennis lessons even though you’ve decided you hate tennis, because you don’t want to see the money wasted.
- Continuing your major in College though you have no desire to continue in the field because you don’t want to feel you wasted all that tuition money.
Bait and Switch
Bait and Switch is a fraudulent sales technique which capitalizes on the Sunk-Cost Fallacy. A seller lures a prospective buyer to their establishment with promises of low cost item. When the customer arrives, the seller informs the buyer that ‘unfortunately’ the item is now out of stock and offers the buy other similar items of a higher cost. Now, the buyer, after driving all the way to the store, taking time out of her/his day, having visualized obtaining the object and having their hopes up, must face a decision: buy the higher cost item and at least have something to show for all my efforts or admit that she/he fell for the fraud and just walk out, promising to themselves to be more cautious next time.
Religion can offer the believer all sorts of benefits and though some may actually materialize, some of the biggest promises don’t pan out (for obvious reasons). The believer, instead, then buys into cheaper items (I will let you think of example). Then, once even further invested, the cost of leaving the disappointing religion is felt to be too great. The believer is left standing at the bottom of a big hole they dug for themselves. Actually, today I read an Dr. Richard Beck’s excellent site where, as a Christian, he discussed Bait and Switch and offers ways out (within the tradition, of course). This article, to me, is an example of how religion can be used well — and ironically, to help people duped by their own religion.
My Question for the De-Converted
Before de-converting, did any of you former-believers feel you fell for the Bait & Switch technique or the Sunk-Cost Fallacy? Could you give us examples. How long were in this predicament? Months? years?