Concorde, wasps and sunk cost

You would have seen this image, its well circulated in the designated daily motivation industry. i.e. WhatsApp! It reads “I’ve come way too far to quit now”.

I believe the source is YouTube

This was sent to me at least thrice during this week. At this rate, I would easily categorize it as an epidemic! So, I thought let’s blog it!

For your information, I am not running out of topics for having picked a WhatsApp forward. It’s just that, this ahead has a shining logical fallacy, and I happened to know a thing or two about it.

Okay, let’s start.

The “quit” part is uncomplicated and straightforward. You ‘quit’ something (or don’t) based on various considerations and circumstances such as feasibility, economic viability, Intuition (wink) [1]. But, despite unfavourable conditions, if you continue to not quit with the sole reason of “You’ve come way too far…” that would be a colossal error of judgement.

Let me give you a few examples:

  1. You have bought an expensive book (say, Ayn Rand, which is a boundary condition for ‘boring’).  You are turning pages, and just with 15 pages, you realize this book is not cut-out for you (or another way around). But you would continue to read the book till the end – because (drumroll) you paid hard-earned ‘money’!
  2. Same situation for a movie. You do not get up and leave the cinema for the sole reason that ‘you paid.’
  3. Another example. You choose to continue paying premiums for Market linked Insurance policies because you have already paid seven and three more to go!

There is a name for this. It’s called Sunk-Cost Fallacy. Let me elaborate. A ‘Sunk Cost fallacy’ is a behaviour of person/organization which continue to invest resources(funds/effort) on a project with a sole rationale that a great deal of resources has been poured in already. This,  even when tangible info of evidence shows that there are no economically viable end results.

This is also called Concorde fallacy became notorious due to an unjustified pursuit of a failed project by French and British government. Concorde was a defence aircraft, halfway through the development pieces of evidence were suggesting Concorde will never be economically feasible. Despite that, governments continued spending on it with only reason “a lot has been spent on it already”.

We have some examples from the animal kingdom as well. ‘Digger wasps’ are known to defend their nests with a disproportionate amount of energy and rigour than they had spent to build them. The logical step would be forfeit and create a new nest.

That’s all for today. You can let me know if you think of more examples.

Appendix

  1. I am not a big fan of Intuition a.k.a Gut feeling. I believe its effectiveness is only a statistical probability, which is highly cherry-picked and exaggerated.
  2. Apologies if I have offended any wasp lovers (!?) But. Digger wasps are not exactly the brightest folks in the insect kingdom. They are known to show OCD as well. These wasps get so obsessed “inspecting their nest”, they can be literally programmed keep doing it obsessively, compulsively and perpetually!

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