“Don’t dwell on what went wrong. Instead, focus on what to do next. Spend your energies on moving forward toward finding the answer.” -Denis Waitley
TASK AT HAND: This week I’m thinking about sunk costs. Also known as retrospective costs or the fallacy of commitment to sunk costs. Do you own an old pair of shoes you don’t wear any more but, because you spent a pretty penny on them, you refuse to throw them away? This is the sunk cost fallacy at work. It is an erroneous approach to strategy focusing on trying to recover your past investment by holding onto something because you cannot accept it is no longer working (Psychology Today, 24 September 2014). By definition, it is a cost that has already been incurred and cannot be recovered. In other words, it’s time to throw away those shoes!
When trapped by the sunk cost fallacy, you become concerned with what you “paid” for something in the past, rather than what you will get out of it in the future. The fundamental problem with commitment to sunken costs owes to it being a backward looking decision. Consequently, it does not offer you any prospects or opportunities for the future. Interestingly, humans are the only animals who honor sunk costs. Other animals will look for new opportunities as soon as previous ones have been exhausted (Psychological Bulletin 125(5):591–600).
The fallacy of honoring sunken costs resides in our old nemesis of insecurity. The insecurity that changing or giving up on a sunk cost will show others we made a mistake. This relates directly to the phenomenon of loss aversion: we all fear loss and we all want to avoid it. However, you need to see beyond this. That submerged boat, let it sink. Feel stagnation in your current job but afraid start over? It is time to consider your options. Is there a void in your relationship but deny it because of the “time you have already invested in it”? Abandon old rationalizations and bring yourself to realization.
The mindset to best eliminate loss aversion and bypass the sunk cost fallacy is to consider only future benefits and costs when pondering a decision. Assess what you need to invest moving forward. Minimize the desire to include resources, capital or emotion that has been previously spent. The latter is baggage which can weigh you down. By letting go of past costs incurred, you can frame your strategy de novo with improved clarity.
MEDICINE & MACULA: I was in Chicago this week for the American Academy of Ophthalmology (AAO) annual meeting!
On Friday I presented a talk on our technique for retinal embolectomy at the AAO Retina Subspecialty Day. Retinal embolectomy involves the removal of emobli from the retinal vasculature in selective cases of arterial occlusions.
Thanks to everyone for their interest in our technique!
GRATIS: For those who know me, a common place to find me is on a squash court. This past week was the Beyond Walls Squash Week in Saint Paul MN. My home club, The Commodore, was the host club.
In addition to playing in the A singles draw, davidalmeidamd.com was a proud sponsor of this fantastic event benefiting Beyond Walls.
For more information, check out the MN Squash Week page.
My best to you,