sunk costs

there is an area of study in social psychology that deals with behavioral decision making and judgment

simply put, it concerns itself on how people make decisions, from the simple choosing of which shirt to wear to the more complex decision of whether to withdraw US troops from Iraq

a perusal of the studies done in this area would cast doubt on Economic’s assumption on the rationality of man

man (you and I) seems not to be rational after all, well at least not all the time

one proof of this is the phenomena of attending to sunk costs

sunk cost is defined as a permanent loss, something that cannot anymore be recovered whatever one does

for example: you reserved a room in a resort months in advance. paid the non-refundable fee. but a day before your reservation, the weather is bad, you feel terrible, and you dont really feel like going on a vacation

would you still go to the resort or just stay at home?

most people would tend to still continue with their vacation reasoning that they have already paid for the room and it would be a waste of money if they dont push through with it

but the money paid is already a sunk cost. it is gone. you do not have control over the money anymore. what you will do tomorrow is in the future which you can still control

people tend to honor sunk cost with the rationale that they do no want to be wasteful. but then it is not possible to change the past. allowing a wrong decision (ill spent money) to affect future behavior, creating unhappiness rather than happiness is not rational.

there is an attempt to avoid a sure loss. but the thing is, the decision to go through with the vacation is made with the previous status quo (the financial standing prior to the payment) in mind instead of the current situation. (gets? im sure wala ng nagbabasa at this point. hmpft)

if one evaluated the situation with the present financial condition in mind, one will not anymore push through with the vacation since this will not cause financial loss but instead result to a psychological gain (being peaceful and resting at home)

having this in mind i decided for a change to act rationally and inhibit myself from attending to sunk costs

one of which is you

the time we have shared together is gone, it could never be returned

the laughter has been spent, we would never recover it

and the hopes? lets not talk about non-existent things anymore

im not feeling that good

i know i made a reservation

but the road is too hard to navigate

the weather is not cooperating

and i cannot for the life of me obtain any assurance from you that the reservation i made would be honored if i do show up.

so between being rational and being stupid

i choose what i know you will choose

i choose to be rational

i choose to stay home

i choose to be alone.


8 Responses to “sunk costs”

  1. you lost me at your first example. my eyes automatically lead me to your last sentence. all i can say is that you are a brave little man, stupid sometimes but brave. πŸ™‚

  2. hmmm… parang we are always going through the same things, marwin… i like this sunk costs intellectualization , huh… πŸ™‚

  3. armedlittleboy Says:


    misty ha

    what is happening naman in your sphere

  4. akala ko ba magkikita tayo sa saturday? sa saturday na lang… blow by blow account…

  5. armedlittleboy Says:


    di pa yun sa saturday

    sa dec 1 saturday pa yung manila night (sana matuloy)

    sa dec 14 carousel night -sama ka din dito

    di pa kami pde this weekend kse the torture is ongoing sa work

  6. hahaha… ano ba yon, spaced out naman ako. πŸ™‚ sige, sama pa din ako. ok lang ba sa december 1 ko na din kuhanin yung earrings ko? patanong naman kay riza, please… πŸ™‚ basta yung blow by blow account sa december 1 pa din.

  7. May be a little late in saying this, especially what I’m about to say has lost way too much steam. Have time today to dillydally kasi. Still… I have two words for you, dude: sour graping! Hahaha!

    Peace dude! ^.^v

  8. Ay, baduy. Forgot to leave my mark. :-p *braces for acerbic comebacks*

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