The Sunk Cost Fallacy

When I was younger, which was yesterday, I thought about certain elements of the human condition that people, like myself, don’t think about until it is thought about. One such is that in decision-making, attributing disproportionate weight to past costs while diminishing, or full-blown negating, other elements of the equation is an innate propensity. Active awareness of this inherent tendency to act on sunk cost is necessary to ensure decisions are made rationally. Though popular in economics and business, the implications of the Sunk Cost Fallacy are wide and varied. A surprising first-time encounter with this fallacy made me realize that it was neither surprising nor the first time I encountered such encounter.

I’ve conceived and semi-developed a nontrivial number of business ideas as of late and dedicated my full attention to none. As such, the proverbial canons are readied but none have fired. A quick reflection has me thinking that there are three possible explanations for this. For a while, I dismally thought it was either of these two:

  • Never starting means never failing. Internally, I am not ready to take that dive. Which makes sense since I cannot swim.
  • Naysayers have gotten to me, stripped me of my aspirations, mummifying my childhood dreams.

But maybe (as the light shimmers in my eyes), maybe, it’s this:

  • Overcoming the Sunk Cost Fallacy: despite the efforts invested in these projects, an objective analysis reveals that opportunities and capabilities are not aligned. As a proponent of “if you do it, you do it right,” it is best to exercise patience until I am better fit to implement the ideas.

Fear of Execution

It’s obvious why people are afraid of execution. Death is a scary thing. And if you execute your idea – an idea borne from sleepless nights and hopeful daydreams – and if you fail, lose all of your savings, end up in a bad part of town, slip on a banana peel and fall in a pool of acid, death could very well be the outcome.

There once was an article from somewhere citing a study from someplace that alcohol helps to induce creativity by inhibiting the inhibition factors associated with the sober mind. By the same token, alcohol could very well assist with this fear of execution. Perhaps with more anti-inhibitory substances circulating the highways of life (I mean blood vessels, drunk diving is bad), one’s limbs may act in accordance with the mind’s desires.

Idea for consideration: to develop a product that captures the excitement of when an idea is first conceived and archives it; essentially, a product that bottles an emotion for later use.

 

Chewing glass, a new hobby.

Life, in one sense, is a collection of events. In another, it is a compilation of the highs and lows of emotions. It, too, is a library of thoughts. Then, the Northern wind came and planted a seed. Why do humans desire to live? Nurtured by curiosity, this single seed grew and from it sprung offspring: is happiness the goal of life? A goal of life? How does one attain true, sustainable happiness? Or is it for the betterment of mankind that we persist on living? The first inquiry perturbed the once benign mass. The second came along and prodded at this mass. The third pushed it out of dormancy. Each thought metastasized into a mass greater than itself, sprouting vessels that fed the starving mind, spread and infected until the very core of its being was never to be the same again. From then, she knew there was more to life than a collection of events, a compilation of emotions, or a library of thoughts. From then, she willed to discover the more that life in all of its preciousness had to offer. From then, she decided she would eat glass.

“Being an entrepreneur is like eating glass and staring into the abyss of death…”

Elon Musk

Risk-taking