The Upside of Quitting: Full Transcript
Stephen J. DUBNER: I’d like you to stop whatever you’re doing right now. No no, I don’t mean like stop so you can give your full attention to this radio show. I mean, honestly, radio is the perfect medium for multitasking — unless maybe you’re using a chainsaw or something. What I mean is Stop. Whatever. You’re. Doing. As in, doing with your life. Maybe it’s your job. Maybe it’s a relationship that’s curdled. Maybe there’s some dream project you’ve been working on so long that you can’t even remember what got you all heated up about it in the first place. I want to encourage you to just quit. Or at least think about quitting. Why? Well, because everybody else is always saying the opposite. It’s become so ingrained that we don’t even think about it any more. You know: “a quitter never wins and a winner never quits.” You know what I think when I hear people say that? I think: Are you sure?
ANNOUNCER: From WNYC and APM: American Public Media, this is Freakonomics Radio. Today: “The Upside of Quitting.” [UNDERWRITING] Here’s your host, Stephen Dubner.
DUBNER: So I hang out with a lot of economists. (I know, you’re envious.) But there are two things they love to talk about that will help us understand quitting. One is called “sunk cost” and the other is “opportunity cost.” “Sunk cost” is about the past — it’s the time, or money, or sweat equity that you’ve put into something, which makes it hard to abandon. “Opportunity cost” is about the future. It means that for every hour or dollar you spend on one thing, you’re giving up the opportunity to spend that hour or dollar on something else — something that might make your life better. If only you weren’t so worried about the sunk cost. If only you could quit. Let’s start with the story of a woman we’ll call “Allie.” Back in 1999, when she was about 25, Allie’s life was already what most people would consider pretty successful:
ALLIE: I was working for a Fortune 500, large company.
DUBNER: What kind of work were you doing?
ALLIE: Industrial computer programming.
DUBNER: What kind of money were you making then?
ALLIE: You know, sixty, seventy thousand dollars a year.
DUBNER: And you were living where?
ALLIE: I was living in Texas.
DUBNER: OK, so sixty or seventy thousand dollars as a twenty-five year old living in Texas goes a pretty long way. That sounds pretty good.
ALLIE: Oh, for sure.
DUBNER: And how did you like to spend your money, generally?
ALLIE: I think like most 25 year old women, you know, shoes, and I had a nice place to live and a decent car to drive, so…
DUBNER: And how did you like the job?
ALLIE: I never loved it. I am more of a social person, and it requires long, long periods of sitting at a computer desk talking to nobody.
DUBNER: I understand that you ended up quitting this job. In your new pursuit — did you have to take a big pay cut?
ALLIE: The new job paid way better.
DUBNER: Way better like, fifty percent more? Twice as much?
DUBNER: Three times as much? Four times as much?
ALLIE: Somewhere around there.
DUBNER: Somewhere around four times as much?
ALLIE: Yeah, maybe even more.
DUBNER: That means, well you must’ve of, that means you must of had to work way more hours than you worked as a computer programmer then, right?
ALLIE: This is what was so great about it. I had to work a lot less.
DUBNER: It must have been very, very, very difficult or unpleasant work, then?
ALLIE: Oh, no. I enjoyed my work and enjoyed my free time and of course the extra money allowed me to do a lot of the things I wasn’t able to do before.
DUBNER: So tell me, what was this new work that you found?
ALLIE: The new job that I found was that I was a high-end escort. It paid somewhere between three hundred and fifty to five hundred dollars an hour.
DUBNER: In retrospect, how do you feel about that decision back then to quit that solid, steady fairly good-paying job for the life of a high-end escort?
ALLIE: You know, of course it’s always scary to leave behind something that’s legit. And go with something that maybe isn’t considered that. I really enjoyed it. I know that it was the right decision for me. For me, I don’t have a problem with having sex with strangers. But it wasn’t something that I felt was demoralizing. And I enjoyed it. I enjoyed my customers; I enjoyed the kindness, and I enjoyed every part of it.
DUBNER: All right, so we’re probably starting off on the wrong foot here. I encourage you to think about quitting, and the first person we hear from quit a perfectly good job to become a hooker! But hear me out. My thesis is simple: in our zeal to “tough things out,” to keep our nose to the grindstone, in our zeal to win, we underestimate the upside of quitting. Now full disclosure here: I am a serial quitter. I’ve quit a dream job, with the New York Times; I quit my childhood dream — being a rock star; I even quit a religion. We’ll get to my quits later. First, here’s someone who made headlines when he quit.
Robert REICH: Well, I decided–I mean this was long in coming–I was feeling more and more miserable about not seeing my kids, it was weighing on me to a greater, and greater extent. I made the decision that shortly after the election I would leave. And then one day I went into the Oval Office and explained to the president that I just felt that I had no choice. He was very understanding about it.
DUBNER: That’s Robert Reich. He was the U.S. Secretary of Labor during President Clinton’s first term. He helped put in place the Family and Medical Leave Act; he raised the minimum wage. On his watch, unemployment fell below 5 percent — the lowest it had been in 20 years! Now it’s hard to say how effective any one person in Washington really is, but Time magazine named Reich one of the 10 best Cabinet members of the twentieth century. And then Reich quit.
REICH: The question for me was well, how do I alert my employees and the segment of the public that felt that they were relying on me in some way? How did I handle it publicly? It’s a delicate matter. I decided that I would write an op-ed for the New York Times, “My Personal Family Leave Act.” I had been responsible for implementing the Family and Medical Leave Act that actually was passed years before. And it seems to me important to say to men as well as women that it is OK to leave your job.
DUBNER: Here, as Reich wrote it, was his dilemma: “You love your job and you love your family, and you desperately want more of both.” His wife and two teenage sons were back in Cambridge, Massachusetts. And he was — well, he could have been anywhere.
REICH: You know the other cabinet officers go to wonderful locations around the world, Paris, London, Shanghai, and elsewhere. The Secretary of Labor goes to Toledo, Ohio, or maybe St. Louis if it’s really a great day.
DUBNER: The funny thing is no one believed Reich quit because he actually wanted to spend more time with his family. That’s what CEO’s say when they’re booted. But people — especially male people — don’t quit White House jobs to do that. But Reich really meant it! As he saw it, there was a big upside to quitting.
REICH: It was exactly the right move. I think if I had not done it I would have regretted it all my life. I wouldn’t have spent any time–the boys then would have gone off to college, off to their careers, you know I just wouldn’t have those years. At the same time, I think I was fooling myself a little bit in thinking that young teenage boys would drop everything when their father came home and say, “Oh dad it’s great to have you, let’s play!” No, they were very happy to have me there but then they said, “But dad, we’re going off with our friends.” So, I kind of would trail around after them a little bit with my with my metaphoric tail between my legs and try to, you know, well say, “Wouldn’t you like to play? How about going to a baseball game?”
DUBNER: Robert Reich quit what was, for him, a dream job: running the Department of Labor of the United States. But tell me the truth — when you were a kid, did you dream of running the Department of Labor? Or maybe you had a dream that sounded more like this.
Justin HUMPHRIES: You get a phone call that says, ‘How’s it feel to be the next member of the Houston Astros?’ It’s a dream come true.So I ended up signing. I got some money to pay for school, and went straight to Martinsville at 18.
DUBNER.: That’s Justin Humphries. Not long ago, he was considered one of the best young baseball players in the country — a big power-hitter from a suburb of Houston. Getting drafted by the hometown Astros was especially sweet — and they threw in some money for education, for later. But Humphries wasn’t thinking about that. He had one goal: to make the majors. So he went off to the Astros’ minor-league team in Martinsville, Virginia. And then more teams in Kentucky, Louisiana, Florida, New Jersey. But not, you may have noticed, Houston. He hit pretty well — but he hurt his wrist, and then his knee, and in 2009, at the ripe age of 27, Humphries quit baseball. Now, only 11 percent of the kids who get drafted each year make the majors; but probably close to 100 percent of them think they will. Humphries, even before he quit for good, started back in school, at a junior college in Texas. He wound up transferring to Columbia University, where he took a sociology course with a professor named Sudhir Venkatesh. You may recognize that name. We wrote about his exploits in Freakonomics; as a grad student in Chicago, Venkatesh embedded himself with a crack gang, and got access to their financial records. We wrote about him in SuperFreakonomics too: he did an extensive survey of street prostitutes.Guess what Venkatesh is studying these days?
Sudhir VENKATESH: I’m interested in quitting for a number of reasons, not the least of which is that it’s hard for me to do it. But I also think it’s just really, really hard the older you get, especially when you start identifying yourself with a job.
DUBNER: All right, so you actually looked in a fairly systematic, empirical way at baseball players.
VENKATESH: So, I actually never thought I would be interested in looking at baseball from the standpoint of a job, and one of my students, Justin Humphries, used to play baseball for the Houston Astros organization. And he was in my class.
HUMPHRIES: So, I was sitting in his classroom, I started thinking about all the issues that I had seen in independent baseball and affiliated baseball: guys living check-to-check, struggling with whether they should go back to school, family life, issues at home. And I thought if I could use some of the things that we were learning in class, talk to some of these guys, and find out whether the stories and things that I was seeing and hearing would be reflected in the numbers.
VENKATESH: We followed a sample of the draft class of 2001, and so that’s about 10 years, and so we thought that would help us understand what happens to these folks. Now, this doesn’t include the immigrants because when they came into the country and they didn’t go through the draft to play ball. These are just the people who were out of high school or who were in college, and they were drafted by a major league team. I think one of the most curious things that we find is how much ten years matter. If you take two people who grew up in the same circumstances, let’s say one played baseball and one didn’t, the person who plays baseball is making about forty percent less on average ten years after they enter the game than the person who decides not to play baseball and who just wanted a regular career.
DUBNER: All right, so what kind of background was typical for the American-born players that you’re tracking?
VENKATESH: The average player probably looks like an upper-middle-class kid who comes out of college or comes out of high school. And when you follow an upper-middle-class kid for about seven to ten years, they’re probably going to make higher than the median average income. They’re probably going to live in a neighborhood that’s relatively safe. They’re going to have a career. Now, when you take the counterpart among the pool that was drafted, that median kid, that kid looks likes he’s making about twenty to twenty-four thousand dollars a year, which is not a lot of money. He’s working probably five to seven months playing baseball, and then struggling to find part-time work in the off-season. ight be coaching, might be doing some training, might be working on a construction site. ight be working in fast food.
DUBNER: So, Sudhir, you went down to Camden not long ago, right? To talk to some of these ballplayers? Camden is in the Atlantic League. That’s an independent league, meaning there’s no direct path to a big-league team. A lot of the guys on a team like this have already been through the minor leagues and either topped out in talent or aged out, right?
VENKATESH: Most of the guys on the Camden Riversharks are probably in their late twenties. And so they’ve actually had careers in the Minor League system. And it didn’t happen for them. And so they come into the Atlantic League thinking that they’re still going to be able to make it. You sort of want to be able to tell them, “Hey do you know that it’s really unlikely that you’re going to make it?” And the fact is that we learned that very few people, if any, around them are telling them this. So they’re not really prepared to talk about it, except some. Particularly this guy Noah Hall was a really, really interesting person because he actually was thinking that this may be the end.
Noah HALL: It’s probably not happening, you know. It’s probably not happening, but I’m still going to, you know, prepare and everything the same way I would, regardless, you know? Because you never know. You still never know. I mean, in the back, the way back of my mind it’s still there, you know. I know, I feel like, trust me, I feel like sometimes hey, if I have a good start to this year, whatever happens you never know. I could get picked up, and if I went off wherever I went, it could happen.
VENKATESH: Noah is 34. Noah has been playing 16 seasons including this one. When you look at him, you probably don’t think that he is a baseball player. He looks like a running back. This is a guy who really looks like he’s never ever going to stop playing.
HALL: Some guys just see the writing on the wall. And I just try to ignore the writing on the wall. I don’t know; I don’t want to look back and say I didn’t give it everything I could. I think I still, I could still play another 5, 10 years, I think.
VENKATESH: So Noah’s from Northern California, and he was raised by his mom, a nurse. And Noah has a wife, Kelly — and they have a lovely son, Isaiah. And Kelly and Isaiah follow Noah around to whatever team he ends up playing for that season — and let me tell you he’s played on a lot of teams over the years. After Noah’s practice, I had a chance to go out to dinner with the Hall family and get to know them a little bit.
Kelly HALL: I’m the one who’s there like when he gets out and has a good game or when he has a bad game. I’m the one…I go through that kind of emotional roller coaster with him.
VENKATESH: So one of the strange things we found out when we spoke to baseball players is that they have their own language for quitting. They actually quit. They just don’t call it that. They don’t call it quitting. They don’t call it giving up. But, they say, “You know what? I’m just going to shut it down for a while.”
VENKATESH: So, what does it mean to be a quitter as opposed to a “shutter downer”?
HALL: Probably the same thing, is just sounds better when you say ‘I’m just shutting down.’ You know, it’s like you’re not really doing it, but, you know, you are.
VENKATESH: Have you ever wanted to tell them, but you had to hold yourself back?
K.HALL: To shut it down? All the time.
VENKATESH: Oh yeah?
K. HALL: Oh yeah, all the time. Especially in the last couple of years. Yeah, especially in the last couple of years we’ve really…we’ve actually fought over it. Because it is, it’s so hard. Like I understand, being his wife and trying to be supportive. I understand that it’s got to be really hard, because I do know how much he loves the game.
DUBNER: Wow, that’s particularly poignant in my view, because you know, because baseball’s one of those rare sports that because it doesn’t have a clock, no game is ever out of reach. I mean, you could be behind a thousand runs in the bottom of the ninth and theoretically you can still come back and win. So that’s part of the ethic of baseball is never, never, never quit. Quitting is not an option.
VENKATESH: Yeah, quitting is usually not an option. But Justin is trying to make it easier on the players to quit and to make that transition. He’s been working on building an organization that could help players to get out of baseball when the time is right and to join that world that the rest of us live in.
HUMPHRIES: Well, when you’re 25, playing in independent ball, making less than $2,000 a month, living off your parents because you can’t financially sustain yourself like that. At some point you have to say to look…with no degree. I had less than an Associates degree at that point. So, at some point, you have to tell yourself, ‘I can’t do this to myself. I can’t do this to my parents.And I can’t continue when I know that they’re untapped potential to do other things.
DUBNER: So Justin Humphries stared right into the dark heart of his sunk costs, all those years he spent pursuing his dream – and he made the big quit. We’ll hear more from Sudhir Venkatesh later in the show. In a moment, we’ll tell you what my number-crunching “Freakonomics” co-author Steve Levitt has in common with a bunch of abs-crunching Navy SEALs.
ANNOUNCER: From WNYC and APM: American Public Media, this is Freakonomics Radio. Here’s your host, Stephen Dubner.
DUBNER: So for ballplayers like Justin Humphries and Noah Hall, quitting their athletic dream is a long, painful process. Steve Levitt — he’s my Freakonomics friend and co-author, an economist at the University of Chicago — he advocates quitting fast.
LEVITT: I try to talk my grad students into quitting all the time.
DUBNER: Quitting grad school?
LEVITT: Quitting grad school, yeah. A lot of people — you make choices without a lot of information and then you get new information. And quitting is often the right thing to do. I try to talk my kids into quitting soccer, baseball if they’re not good at it. I mean, I’ve never had any shame in quitting. I’ve quit economic theory, I quit macroeconomics. I’ve pretty much quit everything that I’m bad at.
DUBNER: You do have this mantra: fail fast.
LEVITT: Fail quickly, yeah, exactly. So if I were to say one of the single most important explanations for how I managed to succeed against all odds in the field of economics, it was by being a quitter. That ever since the beginning, my mantra has been “fail quickly.” If I started with a hundred ideas, I’m lucky if two or three of those ideas will ever turn into academic papers. One of my great skills as an economist has been to recognize the need to fail quickly and the willingness to jettison a project as soon as I realize it’s likely to fail.
DUBNER: Getting talked into quitting grad school by your 155-pound professor is one thing. How about a Navy SEAL instructor?
Eric GREITENS: So Hell Week is considered to be the hardest week of the hardest military training in the world.
DUBNER: That’s Eric Greitens. He got a PhD in politics from Oxford and then joined the Navy SEALS. He fought in Iraq, Afghanistan, and elsewhere, and has now has written a book called “The Heart and the Fist: The Education of a Humanitarian, the Making of a Navy SEAL.” Here’s how Greitens remembers Hell Week.
GREITENS: It is a week of continuous military training during which most classes sleep for a total of two to five hours over the course of the entire week. During Hell Week they have you running for miles in soft sand on the beach, doing two-mile ocean swims, running the obstacle course, they put you on small teams and ask you to land small rubber boats on jagged rocks in the middle of the night. There are all of these tests which are designed to push people to their physical, mental and emotional limit.
DUBNER: Hell Week is a useful way for the Navy to determine who’s fit to be a SEAL, the kind of person you’d want to send to get Osama Bin Laden. Greitens says the instructors hover over you, taunting you, practically begging you to quit. And the vast majority would quit before it was over. That’s the point.
GREITENS: You’ll hear the instructors come out with their bullhorns and they’d say “That’s right, gentlemen, this is only the beginning of the second night.” And what they did then was the instructors took us out and they lined us up on the beach and they had us watch as the sun was setting. And as the sun was setting the instructors started to get inside people’s minds and said “Tonight is going to be the hardest and the coldest and the toughest night of your lives.” And they’d come over their bullhorns and they’d say “The week just gets colder and tougher and worse and you’re only at the beginning.” And they really started to get inside people’s minds. And I can remember the instructor saying at one point, “If anybody quits right now, we’ll give you a hot coffee and doughnuts.” Everybody was freezing, so they set up this little incentive over there if you want to go over and ring the bell you can quit and they’ll give you hot coffee and doughnuts. And the whole idea is that the instructors really encourage, they want everyone to succeed, but if people are going to quit, they want to encourage them to quit.
DUBNER: When you quit by the bell, you ring it three times. This tells everyone in earshot that you’re done. Greitens says that there are two kinds of quitters. The ones who make excuses and the ones who are honest with themselves.
GREITENS: I don’t think many people want to say to themselves that they’ve quit. At the same time, we’ve all failed in our lives, we’ve all failed at different things in different ways and I think there’s a lot to be said about facing that failure squarely. And the people who I know, who were able to admit, you know, “This isn’t the right for me at this time and I went over and I decided to quit, I decided to ring the bell,” they’re really able to move on from their experience. And I do find that there’s only shame in it if you feel shame.
DUBNER: So what would you say if I told you there’s evidence that quitting is good for you? Physiologically and psychologically good for you?
Carsten WROSCH: People who are better able to let go when they experience unattainable goals, they have the experience, for example, less depressive symptoms, less negative affect over time. They also have lower Cortisol levels, and they have lower levels of systemic inflammation which is a marker of immune functioning. And they develop fewer physical health problems over time.
DUBNER: That’s Carsten Wrosch — no relation to Robert Reich. Wrosch is a psychology professor at Concordia University in Montreal. In a study of 90 adolescents, he and a colleague found that being able to abandon goals that are essentially unattainable is good for your health. Now, you have to ask yourself — what’s unattainable and what’s not? When Justin Humphries was 18 years old, the major leagues seemed pretty attainable. By 25? Not so much. If I were put through Hell Week? Unattainable. According to Wrosch, each of us encounters an unattainable goal about once a year. Unfortunately, nobody’s walking around with a big neon sign urging us to quit.
DUBNER: This is a puzzle and we need your help in solving it. If persistence is a virtue, generally, how is a person to know when he or she under which circumstances he or she should quit or disengage?
WROSCH: Yeah, that’s I would say the one-million dollar question. When to struggle and when to quit. I don’t think it’s a general answer to this question. However, people can make two different mistakes in the regulation of their life. They can quit too early when they should have persisted or they can quit too late.
DUBNER: OK. No offense, Professor Wrosch but that’s not very helpful. Sometimes you quit too early when you should have persisted and sometimes you persist too long when you should have quit? Really, that’s all you’ve got? Really, that’s all he’s got. Which shows, if nothing else, what a true dilemma this is — to quit or not to quit.
DUBNER: Let me ask you this, are you much of a quitter?
WROSCH: I am bad at quitting. I really have a difficult time. I try to persist as much as possible. Maybe that’s why this phenomenon is so interesting to me.
DUBNER: Well maybe I can help you. Why don’t you tell me something that you’re involved in that you think is a goal that may be unattainable and I’ll try to talk you into quitting.
WROSCH: Well, at this point I can’t think about something that is unattainable right now. But these things they pop up over time.
DUBNER: Do you smoke by chance?
WROSCH: Yeah, actually I’m a smoker.
DUBNER: Do you want to quit smoking?
WROSCH: Well, yeah, on some level but on a different level I enjoy it very much.
DUBNER: This conversation went on for a while. I’ll spare you the details. Let me say this: Either I’m incredibly unpersuasive or Carsten Wrosch really, really doesn’t want to quit smoking. Maybe both. He says he wants to quit, but he doesn’t really sound like it. It’s like an O. Henry story: the professor of quitting who can’t quit smoking. You can empathize, can’t you? I can empathize. There’s something you really want to quit, you know you’ll be healthier for it, but you can’t. You try and you try and you try but you just can’t. Until one day, finally, you wake up and you have this vision of what your life would be without that thing in it — and it’s not so terrible! That’s how my first quit happened.
[MUSIC“Cosmopolitan Lovesick Blues”]
DUBNER: Yep, that’s my old band. We were called The Right Profile. Started in college, down in North Carolina. There were four of us. We were pretty bad at first. But we took it seriously, kept at it. And that’s how I sound when I sing. We worked hard at it because it was incredibly fun but also because it was our dream. I mean, c’mon, who doesn’t dream at some point of being a rock star?
DUBNER: All right, so Jon, when you hear that song which you didn’t play on this recording but you played this song, I don’t know many times you ended up playing this song in your life.
WURSTER: Probably at least 50 times.
DUBNER: That’s Jon Wurster. (We called him Chester but his actual name is Jon.) He was our drummer — awesome drummer. You might know his name–he went on to play with Superchunk for years. He still plays with them, and with the Mountain Goats too. The other guys in the band were Jeff Foster and Tim Fleming. We played all over the place. We made demo tapes, released a single. Got a management team in New York City, the same guys who managed the Replacements and the Del Fuegos, which were bands that we loved. The managers brought us up to New York to play for the major record labels.
WURSTER: Two months later, I remember going two the CBGB’s in New York to play there a showcase show for some labels, one of which was Arista and I remember just in this total dive, CBGB’s, there was a table and on the table was a card that saidm “Reserved for Clive Davis.”
DUBNER: Do you remember going up to their office on that trip? Do you remember when he had Aretha on the phone briefly to tell us to sign with Arista?
WURSTER: Yes. I remember when some people…when everybody kind of walked away we would go and look through people’s Rolodexes to find the personal numbers of Carly Simon and somebody else. We never used them but we just thought that was hilarious just to like thumb through this Rolodex and find her number.
DUBNER: So, it’s true: Clive Davis, the music-industry giant, signed us to Arista Records.It was incredibly exciting. But also weird. We were this little indie, half-punky half-country band, used to doing things the way we did them, and now we moved to New York. It was hard. Maybe we were just a bad fit with Arista. They wanted pop hits; we didn’t seem to have them.
The other thing is: I wasn’t sure I wanted to be a rock star anymore. As bands go, we were pretty straight-laced. No drugs, not much drinking. But the whole lifestyle, especially as we got a little bit more successful and started hanging around with bigger bands — it became less attractive. The idea of wanting to be famous — which seemed fun at first — began to feel unsavory, unhealthy. For six years, this was all I wanted. But one night I was sitting in a hotel room in Memphis, working on some lyrics in my notebook. And I found myself writing the words “What do I want?” I thought about it. I didn’t really know anymore. And then, I wrote “Not this.” A couple weeks later, I quit the band.
WURSTER: We were playing some songs and we could just tell you were kind of moody and maybe something was wrong but we knew what was wrong. We knew that this might be where it parts soon, we just kind of felt that. We played something and I remember Jeff saying to you ‘What’s wrong?’ or ‘What’s your problem?’ I don’t know exactly what you said but I remember something to the effect of “I don’t think I want to do this anymore.”
DUBNER: The hardest part was that being in the band wasn’t just what I did — it was what I was. Like Justin Humphries and the other ballplayers — baseball isn’t just a thing you do; it’s your identity. I’ll be honest with you, it was tough. I grieved; I mourned; and I had to start over, as a writer. At that point, I didn’t know much about economics. I’d never heard of the sunk-cost fallacy. But by quitting something I’d put years of work into, that’s what I was fighting against.
Hal ARKES: One of the most common examples is the Vietnam War because it was often said that we’ve invested too much to quit. Well, it’s not a good idea to continue to invest if you feel it’s a losing course of action. You ought to stop that and stop the losing course of action.
DUBNER: That’s Hal Arkes, he’s a psychology professor at Ohio State University. A “sunk cost” is just what it sounds like: time or money you’ve already spent. The sunk-cost fallacy is when you tell yourself that you can’t quit because of all that time or money you spent. We shouldn’t fall for this fallacy, but we do it all the time. Arkes and a colleague learned something that makes falling for the sunk-cost fallacy even more embarrassing. It turns out that children don’t fall for it — or even animals.
ARKES: Your dog is not going to have any rules like “Oh, I spent a lot of time at that location waiting for him to feed me, and I wouldn’t want to waste all that time, so I’ll go back there and wait even though it wasn’t very successful.” Now, humans have these other things that get in the way.
DUBNER: What gets in the way? Apparently we take a rule we learn growing up — to not be wasteful — and overapply it.
ARKES: Well, there’s that chance that what we’re working on actually can be rescued, can be resuscitated. Making the distinction and trying to decide whether this is a truly a lost cause or not, I recognize is a difficult decision sometimes because it’s not one of these things where its clearly one or the other. But after enough negative feedback, it should be more clear then.
DUBNER: I guess with my band, I’d finally had enough negative feedback to quit. I’ll tell you the truth, some of the feedback, I still miss. It was insanely fun. And part of me still wishes I’d stuck it out, at least to finish that first record for Arista. But the bottom line? I’m so glad I quit. For me, it was the right move. Much as I miss music sometimes, the upside of quitting for me meant I got to lead a life more like the one that I envisioned.
Coming up: Remember Allie — the high-end escort from the start of the show? Well, she’s back — and quitting again.
ANNOUNCER: From WNYC and APM, American Public Media, this is Freakonomics Radio. Here’s your host, Stephen Dubner.
DUBNER: You remember Allie? The Texas woman who quit computer programming to become a high-end escort? Sure you do. At her peak, she was earning about $300,000 a year.
DUBNER: Now, Allie are you still working as an escort?
ALLIE: No, I decided to get out of the escort business. You know, it was wonderful to me. I enjoyed it, I made a lot of money but I don’t regret quitting, either, again. But we talk about opportunity cost, and when I went into the escort business I wasn’t dating anybody, I just really wanted to enjoy life and be free and that’s what I did. But you know, I met somebody and we decided together that, you now, that we wanted a lifestyle that didn’t include prostitution. So, I let it go.
DUBNER: And besides enjoying life and traveling and spending time with your companion, what else have you been doing?
ALLIE: I went to school and studied economics, but you know, mostly I’m enjoying life. You know?
DUBNER: All right, so I realize that Allie isn’t your typical prostitute. I mean, first of all, she made a lot of money. On top of that, she went back to school to study economics! She really gets opportunity cost, so much so that, when the time was right, she quit being a prostitute. Sudhir Venkatesh, the sociologist who talked to fading baseball players for us, he’s also been asking prostitutes about quitting. But first, I asked him about something he recently quit.
VENKATESH: I quit an administrative job that I had at my university for a couple of years and actually probably should have quit after a couple days.
DUBNER: Why’d you quit, finally?
VENKATESH: Well, I think I quit because I realized that I was no good at the job. You know, luckily I have a job as a professor, and so I’m not in the ranks of the unemployed like so many people who sometimes quit jobs that they don’t like. So I’m back to doing research, which I love.
DUBNER: You heard me talking to Allie, who kind of falls into that rare category. She’s someone who did very, very well and decided to, if not cash out necessarily, at least to stop. But I understand that you talked to some people, sex workers, one named Maxine I believe, who doesn’t see that as the way to go. So talk to me a little bit about Maxine and her attitude toward quitting.
VENKATESH: I should say that we’re not using the real names of the women that we’re interviewed here, but Maxine, as we’re calling her, is a really curious person because she really goes against a lot of the stereotypes that we have about women in sex work. She’s been working as a sex worker for twenty-two years. She laughs as she says, you know, I don’t know if I’m ever going to quit.
MAXINE: You know, I never think about retiring. I know many workers who are in their fifties, sixties, I met one in her early seventies who is still working. And in our current society with the tearing down of our infrastructures and our social security nets, all of us are going to be working for a long time.
DUBNER: All right, so there are those prostitutes who do quit. And I just wonder, you know, how does that happen? If you want to go from sex work into the legitimate labor market, how do you go about, for instance, putting together a resume?
VENKATESH: Right, imagine you’ve been a sex worker for a year, two years, three years, five years, and you have to account for that time, you have to account for what you’ve done. Crystal Deboise is the co-director of the Sex Workers Project at the Urban Justice Center in New York City, and actually one of the services the center provides, that Crystal helps sex workers with, is getting their resumes ready.
Crystal DEBOISE: So it becomes a creative endeavor. So we dig deep, and I say, Well, what have you done? Somebody might say, well I used to wash cars with my uncle on the weekends, and they’ll say, “Oh no that wasn’t a job, that was just a thing that I did.” And I was like, “No, we’re going to make that sound like you worked, you know, that it’s a job. It was a job. You were working, you were showing up, you were doing a good job.” And nine times out of ten the person says, “Oh that’s lying, and I can’t do that.” And I have to orient them into saying, “Look everybody is beefing up their resume.”
VENKATESH: So dealing with the resume, making a creative resume is one thing. But when you leave sex work, you also face this issue about taking a huge pay cut. They will probably never make that kind of money again. We spoke to someone, Maya, who is a former prostitute who now works as a booker, as a manager. She schedules and screens appointments for other sex workers in Tucson, Arizona.
MAYA: And, so a lot of women find themselves going back to sex work when they don’t really want to, you know, myself included. Even booking, I don’t really want to book anymore, but it’s very, very hard to go from making three hundred dollars an hour to making twenty-five dollars an hour, which would be decent pay in the real world.
DUBNER: So, Sudhir you’ve talked to baseball players who were reluctant to quit, even though they’re not going to make the major leagues. You’ve talked to sex workers, some of whom are reluctant to quit, but some of whom do a really, really good job of it. For those who do a good job, talk to me about how they prepare for it, and maybe how what they do we could all learn from a little bit.
VENKATESH: The first thing is you’ve got to pull that Band-Aid off, and do it quickly. And the ones that are really successful in leaving a trade in which they thought that they were going to be doing for a long time, or that they had prepared for, poured a lot of hours in, you know, when they make that decision quickly, they do pretty well. I think this idea of not looking back, I know it’s a clichéd expression, but so many of the people that are able to move on, just go forward. And the next time I take a job, I’m going to see if at the second day, I shouldn’t be figuring out how to get the heck out of there.
DUBNER: I’m sure some of you, as you listen to people talk about quitting prostitution, your mind jumps the timeline and you go back and stop these women from becoming prostitutes in the first place. It’s like watching a horror movie where you’re saying: “No, no, no! Don’t open that door!” But these women did open that door. There are, however, some places that try to get people to quit before they’ve even started. We sent Stacey Vanek Smith, a reporter for Marketplace, to get the details.
Stacey VANEK SMITH: How much do you like your job? If someone offered you money to quit, How much would it take for you to do it?
Christina GOMEZ: This job is worth more than a million. Definitely. I love it here. It’s very hard to get in, but once you’re in, It’s kind of like the Wizard of Oz. We’re in the Emerald City… that’s what I feel like
VANEK SMITH: That’s Christina Gomez. And would you believe she’s talking about a job that pays just a few bucks above minimum wage? The job is at Zappos, an online shoe store that Amazon paid almost a billion dollars for in 2009. At an employee training session in Las Vegas, everybody talked like that. Most of the 35 people in my session were headed to the company’s call center, where they will earn about eleven dollars an hour, dealing with customer questions and complaints. But as it trains these new hires, Zappos also throws them a curve ball. Here’s Marcela Gutierrez, a trainer with the Zappos.
Marcela GUTIERREZ: Remember how we said, that we want this to be more than a job for you guys, we want it to be a career, we want it to be a calling for everybody. I’m here to offer you $3,000 if you decide that this is not the right place for you.
VANEK SMITH: It’s known around Zappos as The offer During training — when these new employees are already being paid, Zappos offers 3,000 dollars to any new hire who wants to walk away from the job. It’s been going on for a few years, and it’s … gotten some press. But secret or no, what is the company thinking? I put that question to company CEO Tony Hsieh, who masterminded The Offer.
Tony HSIEH: It’s really putting the employee in the position of ‘Do you care more about money or do you care more about this culture and the company?’ And if they care more about the easy money then we probably aren’t the right fit for them.
VANEK SMITH: Zappos talks about its culture a lot. And Hsieh says that culture is enough to keep people from taking an offer anywhere else, or Zappos’ offer to leave. And when I say culture, I’m not just talking about free soda in the break room and casual Fridays, as I discovered on the company tour with Zappos Supervisor Loren Becker.
Loren BECKER: So we’ve entered the main, building. So we can like officially start our real tour.
VANEK SMITH: Everybody’s wearing sneakers and t-shirts, there are sign-up sheets for picnics and poker groups. Conference rooms are decorated in outer space and “Under the Sea” themes.
VANEK SMITH: It looks like the convergence of 7 difference holidays.
BECKER: It definitely does. You’ll see that everybody’s desk is decorated different. There are knick-knacks, rubber duckies, streamers. It’s pretty crazy.
VANEK SMITH: People are so excited to join the “crazy,” they turn down the free money. Out of the nearly two thousand people Zappos has trained, the company says only about 30 have ever taken the offer. Christina Gomez is one of those people. remember her?
GOMEZ: It’s kind of like the Wizard of Oz. We’re in the Emerald City, that’s what I feel like.
VANEK SMITH: Turns out, a week after I talked with her, Gomez took the offer. I called her up to ask her what pulled the curtain back.
GOMEZ: It was very cult-like place. It was the honeymoon period and then I started getting comfortable at Zappos and then I started seeing some o f the things that I didn’t really like about it, and so we broke up.
VANEK SMITH: Gomez says The Offer wasn’t the main reason she quit. She says the schedule Zappos gave her didn’t work with her child care and another job she has at Apple. But how big an incentive is The Offer? Three thousand dollars equals two months of busting your hump in a call center. The fact almost no one takes it, just doesn’t make sense. It does, however, make sense to Dan Ariely, a behavioral economist at Duke who studies decision-making. He says that easy money is actually not so easy.
Dan ARIELY: The reason that this trick works is that people spend ten days, they become a part of the family.
VANEK SMITH: Zappos is all about making trainees feel like family. There are happy hours and scavenger hunts and team projects. And after all that-and before you’ve started actually working… you get The Offer. And it’s a limited-time thing. When it expires, its real power kicks in, says Ariely.
ARIELY: There’s something called cognitive dissonance. It says that if you’ve acted in a certain way, over time, you’re going to overly justify your behavior. So the next morning after you rejected the 3,000 dollars, you’re going to wake up and say, “My goodness, I really much love this company if I rejected this amount.”
VANEK SMITH: Translation: We like suffering for things we love; we like it so much, that if we suffer for something, we will actually decide we must love it. Ariely says fraternities and sororities work like this-when they make rushers stand in the rain or run naked across campus, turning indignity into allegiance. Militaries, sports teams, religious cults all use this tactic too: combining our intense desire to belong with our intense desire to justify our actions. The result? A group of employees who won’t quit even if you pay them.
DUBNER: That’s Marketplace reporter Stacey Vanek Smith. Zappos does sound a bit like a religion. Quitting a religion is never simple. My parents were a pair of Brooklyn-born Jews who, before they met each other, both converted to Roman Catholicism. This was in the mid-1940s; my parents were in their twenties. As you can imagine, this conversion didn’t go over so well with their families. My dad’s father declared him dead, sat shiva for him, never spoke to my father again. So I grew up in a very devout Catholic family, the eighth and youngest kid. And then, when I was in my twenties, I quit Catholicism. Went back to Judaism. My mother took it hard, but not nearly as hard as my dad’s father took it when he converted. Anyway, I’ve always been pretty interested in religious quits.
Saloma FURLONG: My name is Saloma Miller Furlong. I am the author of a new memoir called “Why I Left the Amish.”
Emma GINGERICH: I’m Emma Gingerich, and I go to college at Tarleton State University in Stephenville, Texas. And right now I’m also working on finishing up my book and getting it published.
DUBNER: And what is your book called, Emma?
GINGERICH: “Runaway Amish Girl.”
DUBNER: I wanted to speak to Emma Gingerich and Saloma Furlong because quitting a religion like the Amish seems especially traumatic, with the religion, family and community all mixed up.
DUBNER: When you look back at the decision you made, which was a big one, to quit your religious lifestyle and religious community, talk to me about the price that you feel you paid or the benefit that you gained.
FURLONG: When I think of costs I think of the things that I miss. And definitely the community atmosphere of knowing your place in the community is part of the costs. You know, the church gatherings where they sing the Amish chants and feeling like there’s a sense of legacy almost in that. But the upside of it is there have been so many times, so many moments in my life when I knew that quitting the Amish was the right thing to do. One example was on May 29th of 1982 when I walked into the church sanctuary at Christ Church Presbyterian on the Redstone campus and saw my husband-to-be standing there in a blue tuxedo waiting for me to come up to the altar. That moment encapsulated just how I was doing the right thing. That was literally the happiest day of my life.
DUBNER: So, Emma, if you could just describe as briefly as you want, kind of, your childhood, you know, your family growing up and getting to the point where you decided to leave, and why and how that happened.
GINGERICH: My family used to make baskets and we would take them every Friday and sell them at a little town close to a busy highway. And sometimes it would be me and my sister. We did a lot of things that we weren’t supposed to do. But there was around fifteen was the time when I started thinking about how I would be if I would leave the Amish. And you know, sitting there selling baskets you see a lot of people coming and we used to look at cars and look at all the different colors, and try and pick which one we would want if we would ever leave the Amish.
DUBNER: Did it feel like you became a different person? Are you the same person who just needed a change of scenery? I guess what I really want to know is what was the cost to you of quitting the Amish? What were the downsides? And what were the upsides?
GINGERICH: Well the downsides would be leaving the family and knowing that nothing’s going to be the same again when you go back home to visit. And the upside is yes, you are a different person. You become…to me, I became somebody else, which was good for me.
DUBNER: How old are you now?
DUBNER: And do you have regrets about leaving?
GINGERICH: Not at all.
DUBNER: Saloma Furlong is in her 50s, and now lives in Massachusetts. Not long ago, she did an informal survey of the Amish community where she grew up, in Geauga County, Ohio. Out of about 2,500 households, she estimates some 170 individuals left the community. So quitting isn’t common, but it’s not like it never happens either. Furlong says her father was mentally ill and violent; and that, ultimately, is what led her to leave.
FURLONG: My life was so unbearable that the fear of the known was greater than my fear of the unknown. So, for me, it’s a matter of “Are you happy the way you are? And if not, then quit what you’re doing.” It’s that simple for me.
DUBNER: You make it sound so easy, I’m wondering have you quit other things in life besides the Amish?
FURLONG: Oh, yes.
DUBNER: You’re a serial quitter?
FURLONG: Do you want me to get started?
DUBNER: Yes please.
FURLONG: I’ve quit jobs that were not satisfactory. I quit my bakery business when I realized after ten years of punching bread dough that it was never going to talk back to me and that it was intellectually a desert. Let’s see, what else have I quit? I quit a church community one time. So, yes, I’m a serial quitter. And it’s worked for me, what can I say?
DUBNER: You’re a gold medal quitter; you’re not just a serial quitter. You’re a champion. So, but let me ask you this, in retrospect were all of these quits good?
DUBNER: They were. All right, so you really need to be like a quitting coach, don’t you? You need to travel around the world and tell people, look at this situation, why are you still in this, why are you stuck in this? Do you think that’s a future calling of yours perhaps?
FURLONG: Somebody just asked me that the other day about being a counselor and I said, “Nope it’s not something I want to do.”
DUBNER: Because you’d just quit anyway.
FURLONG: You might be right.
DUBNER: “A quitter never wins and a winner never quits.” In 1937, a self-help pundit named Napoleon Hill included that phrase in his very popular book Think and Grow Rich. Hill was inspired in part by the rags-to-riches industrialist Andrew Carnegie. These days the phrase is often attributed to Vince Lombardi, the legendarily tough football coach. What a lineage! And it does make a lot of sense, doesn’t it? Of course it takes tremendous amounts of time and effort and, for lack of a more scientific word, stick-to-itiveness, to make any real progress in the world. But time and effort and even stick-to-itiveness are not in infinite supply. Remember the opportunity cost: every hour, every ounce of effort you spend here cannot be spent there. So let me counter Napoleon Hill’s phrase with another one, certainly not as well known. It’s something that Stella Adler, the great acting coach, used to say: Your choice is your talent. So choosing the right path, the right project, the right job or passion or religion — that’s where the treasure lies; that’s where the value lies. So if you realize that you’ve made a wrong choice — even if already you’ve sunk way too much cost into it — well, I’ve got one word to say to you, my friend. Quit.
ANNOUNCER: Freakonomics Radio is produced by WNYC, APM: American Public Media and Dubner Productions. Our show was produced by Chris Neary with help from Diana Huynh, Suzie Lechtenberg, Ellen Horne and Peter Clowney. Collin Campbell is our executive producer. This episode was mixed by Dylan Keefe, with help from Michael Raphael. Special thanks to Sudhir Venkatesh, Justin Humphries and Donald Kraybill. If you want more Freakonomics Radio, you can subscribe to our podcast at iTunes, or go to Freakonomics.com, where you’ll find lots of radio, a blog, the books, and more.