When deciding whether to continue, look only at future effort and future return, not at how much you have already put in

Cost

Free. The hard part is accepting that the time you already put in is gone and can't be taken back.

What you get

Money, effort and time already invested make people want to keep going. In psychology this is called the sunk cost effect. Pooling 98 sets of data, the analysis confirmed that this tendency is reliable. If you avoid it, you won't keep putting in time just because you "don't want it to go to waste."

Notes

This is how the theater experiment by Arkes and Blumer worked. A theater at Ohio University sold season tickets, and buyers were randomly given one of three prices: the full price of 15 USD, 2 USD off, or 7 USD off. In the first half of the season, the full-price group attended 4.11 plays on average, against 3.32 and 3.29 for the other two groups. In the second half, the three groups no longer differed clearly. Roth and colleagues found that this effect fades over time, and that older people are less affected.

Evidence grade

B : Supported by research but without a precise number, or based on small or single studies.

Sources

1. Arkes, H. R., & Blumer, C. (1985). The psychology of sunk cost. Organizational Behavior and Human Decision Processes, 35, 124–140. https://doi.org/10.1016/0749-5978(85)90049-4
2. Roth, S., Robbert, T., & Straus, L. (2015). On the sunk-cost effect in economic decision-making: A meta-analytic review. Business Research, 8(1), 99–138. https://doi.org/10.1007/s40685-014-0014-8

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