In her book, Quit: The Power of Knowing When to Walk Away, Annie Duke shares her inspiration and recommendations to help us make better decisions.
These are some of my favorite recommendations from reading the book.
Chapter 5 Sunk Cost and the Fear of Waste
“The sunk cost effect is a cognitive illusion where people take into account resources they have previously sunk into an endeavor when making decisions about whether to continue and spend more.”
“The sunk cost effect causes people to stick in situations that they ought to be quitting.”
“When deciding whether to stick or quit, we are worried that if we walk away, we will have wasted the resources we have spent in the trying.”
“You might be experiencing the sunk cost fallacy if you hear yourself thinking “If I don’t make this work I will have wasted years of my life!” or “We can’t fire her now, she’s been here for decades!””
“Sunk costs snowball, like a katamari. The resources you have already spent make it less likely you will quit, which makes it more likely you will accumulate additional sunk costs, which makes it again less likely you will quit, and so on. The growing debris of your prior commitment makes it increasingly harder to walk away.”
“We don’t like to close mental accounts in the losses.”
“Knowing about the sunk cost effect doesn’t keep you from falling prey to it.”
“You can’t trick yourself into not taking sunk costs into account by trying to view the situation as a new choice. Asking whether or not you would continue if the decision were a fresh one doesn’t mitigate the sunk cost effect the way you might intuitively think it would.”