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.