Meditating on Those Sunk Costs

(Photo: Balint Földesi)

(Photo: Balint Földesi)

The sunk-cost fallacy leads to all sorts of poor decision-making — like staying too long at a bad job or refusing to drop out of a hopeless mayoral campaign.  Here’s how Dubner explained it in our podcast on quitting:

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.

But there’s new hope for all you sunk-cost believers out there: new research (abstractPDF) from Andrew C. Hafenbrack, Zoe Kinias, and Sigal Barsade shows that a 15-minute mindfulness meditation practice can help.  Here’s the BPS Research Digest’s summary of the study:

The researchers first surveyed 178 adults online and found that across the sample, a natural tendency to stay in the moment (called “mindful attention awareness”) tended to correlate with being less prone to the sunk-cost bias.

In two further experiments, involving hundreds of undergrads, Hafenbrack and his colleagues found that just fifteen minutes of guided, breathing-based mindfulness meditation led to less vulnerability to the sunk-cost bias, as measured by one of two hypothetical business decisions.

Resistance to the sunk-cost bias in the first scenario required choosing to buy a superior printing press even though money had already been invested in older technology; resistance in the second scenario required making the decision to discontinue investment in a stealth plane because a rival model made it obsolete. In both cases, participants who undertook the mindfulness training demonstrated less sunk-cost bias (78 and 53 per cent resisted it, respectively, across the two studies), as compared to participants in the control conditions who were instructed to spend the same amount of time mind wandering and thinking of whatever came to mind (just 44 per cent and 29 per cent, respectively, resisted sunk-cost bias).

One further study with 156 online participants looked for mediating factors. This showed that the benefit of mindfulness meditation was mediated by less focus on the past and future, and less negative affect.

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COMMENTS: 6


  1. Steve Cebalt says:

    This is really interesting, because the sunk cost fallacy has always fascinated me. It makes sense that training to focus on the present, and to attempt to screen out the past and future, would lead to fewer sunk-cost-fallacy mistakes.

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  2. Tim Swast says:

    I wonder how sunk costs relate to commitment devices. Is buying an expensive gym membership banking on future-self to fall into this sunk costs fallacy?

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  3. Rolf Degen says:

    This study does not have an adequate control group. See my detailed comment under this post:

    http://bps-research-digest.blogspot.de/2014/01/just-fifteen-minutes-of-mindfulness.html

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  4. sierra says:

    Need some fallacies from Freakonomics. I like the book but I’m supposed to find two fallacies and argue with why it is a fallacy. Please Help. Thanks.

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  5. Chris Elhardt says:

    sunk costs are the reason I buy used cars and drive them until they need to be hauled to the junkyard. Thus far I have found that it’s better to repair a vehicle than to trade it; if you trade it you’re playing the dealer’s game, and you’ll come out worse than if you don’t play.

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  6. Josh says:

    Sunk cost fascinates me. Logically, sunk cost is completely irrelevant.

    It blows me away what people do in the name of sunk cost (most notably and relevant to most are their relationships). That being said, I credit sunk cost with my smoking cessation- should I smoke, that’s seven years down the drain.

    Boggles the mind.

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