Sunk Costs – A matter of opinion?
“Whenever you make a decision, it has to be made according to what you know now and upon reasonable expectations of the future. Hoping that bad results from a past decision will eventually “turn around” if you stick with that decision is wishful thinking of the worst sort. It always takes courage to admit you made a bad choice and that you need to change your mind, but it is the only thing to do. It takes even more courage to try to convince others that they made bad choices and need to accept the sunk costs, but that’s something you sometimes have to do.”
[source: http://c2.com/cgi/wiki?SunkCost]
The idea of sunk costs hit me in a new way in Managerial Economics today. We were reviewing the concept and suddenly it crossed my mind how differently the world would be if we applied the theory to our every day lives – to our friendships and relationships – not just to our financial situations.
It seems cold and heartless to think that someone might apply this concept to a life-long friendship. If I’m frustrated with a best friend of 10 years, should I disregard history and simply make my decision about moving forward on what’s happening at the current time? I never could. It seems impossible that I would ever be able to separate the time already invested from the problem at hand. Relationships and matters of the heart seem to cover territory that Economic theory is not well suited to advise.
But then I look at so many people who get caught up in dysfunctional relationships, who accept less than they deserve in relationships that don’t allow them to reach their full potential, because they’re clinging to sunk costs. They’re clinging to things that once were and not realizing that all the hours they put into maintaining the relationship don’t add up to anything if the extra time put in won’t get them to a point where they’re happy again. Life changes, people change, situations alter and sometimes you have to recognize that certain people don’t fit into your life in the same ways anymore – even if it seems like you’re throwing away three years of your life by letting that relationship “fail.” You can never throw away time that’s already passed; you can only waste the hours, days, weeks, years ahead. So, does Economic theory actually somehow fit into decision making on a deeper level? Can our textbooks teach us how to manage love?
I guess it depends on whether you believe love can (and should) be managed or not.