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Gus Van Horn blog

Reblogged:Watch Those Sunk Costs ... Carefully

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A Hacker News thread regarding a BBC article about the sunk cost fallacy starts off with what I think is a valuable comment:

An interesting twist: sometimes [a project] may be worth finishing purely for the psychological boost of confidence, or other similar meta, 2nd order effects.

I don't have a good algorithm for knowing when this is the case, but especially for smaller individual-level projects, I think it is probably not that uncommon. It also seems highly context dependent -- e.g. if one hasn't had a win in a while, it should be a larger consideration.

Framed another way: first learn how to finish projects, then learn how to finish the right project.

...

The sunk-cost fallacy is a useful tool, but it isn't always easy to apply in practice.
This is a great point, and I have even done this in the past -- albeit on a hunch rather than explicitly deciding something like, I want a win, or I want the experience that will come with plowing ahead, anyway.

This old Berlitz commercial suddenly seems relevant to me in a new way...

Sometimes, one can realize a profit in unexpected ways from something that might be a loss in terms of the original goal. It is good to know that this needn't always occur in retrospect, but can also happen when we don't rush ourselves to cut losses.

-- CAV

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