4 ms·

Honest question - in the concert ticket example, the article said that “ $50 spent on concert tickets..should not be a factor in our current decision-making” (b

Honest question - in the concert ticket example, the article said that “ $50 spent on concert tickets..should not be a factor in our current decision-making” (because it’s irrecoverable). But what if you are still interested in this show? If you choose not to go today, then you would need to purchase another $50 ticket in the future, thus increasing your total investment to $100. But if you go today, despite being sick, your investment would only be $50. So the $50 already spent could be a logical input into your future decision making…assuming you still want to go, and are evaluating a second purchase or not Is this still sunk cost fallacy?

Jtsummers 5y ago
The fallacy is going because of the resources (whatever they may be) spent, not considering (or fairly weighting) other considerations. If you think the concert is going to be sufficiently enjoyable (or unique, last concert by your favorite band) to go to despite being sick, having to deal with frustrating traffic, and likely getting sicker because of going, then go. But don't go because you spent $50 just to end up laid up in bed for a week after and never enjoying the concert because your sinuses were so stuffed up you couldn't even hear it.
- djmips 5y ago
  It's important for a good analogy to have these bases covered.
  - Jtsummers 5y ago
    It's not an analogy, it's an example. And everything I listed in my comment came from the article: > On the day of the concert, you feel sick and it’s raining outside. You know that traffic will be worse because of the rain and that you risk getting sicker by going to the concert. So they did cover those elements. The point of the article is to discuss the sunk cost fallacy, which they did. The fallacy is choosing to go to the concert because you spent the $50 on the ticket, disregarding the other considerations or weighing them below the sunk cost in importance. If you go despite the issues they mention but because you think it's going to be worth it (in enjoyment, uniqueness, whatever) then you've made a decision that wasn't based on the fallacy. Which is what they discuss in the article.
manwe150 5y ago
In your question, it sounds like you only want to see this concert live once, so your choice is between seeing it now “for free,” but sick, or later for $50. That is not a sunk cost fallacy, since the current marginal cost is lower to see them now. But there are many factors that can be a sunk cost fallacy too. If you hope to go again anyways, for example, then that future interest is not a factor now. Or if you pay more than $50 extra (or refuse to pay less than $50 extra) to get to the show tonight. Since if you incur a new marginal cost by being sick, you must consider that cost in relation to the expected future cost of the show, not the money already invested in it. So to avoid the sunk cost fallacy, you should always be willing to pay an extra $50 (in expected total), even after spending multiples of that (unexpectedly), and then still not go if someone would charge an extra $51 unexpectedly.
djmips 5y ago
I had this decision in 2007 to see Daft Punk or take care of a tree that had fell at my home. In hind-sight I'd much rather have gone to the concert. This analogy is terrible.

Jtsummers 5y ago

The fallacy is going because of the resources (whatever they may be) spent, not considering (or fairly weighting) other considerations. If you think the concert is going to be sufficiently enjoyable (or unique, last concert by your favorite band) to go to despite being sick, having to deal with frustrating traffic, and likely getting sicker because of going, then go. But don't go because you spent $50 just to end up laid up in bed for a week after and never enjoying the concert because your sinuses were so stuffed up you couldn't even hear it.

djmips 5y ago
It's important for a good analogy to have these bases covered.
- Jtsummers 5y ago
  It's not an analogy, it's an example. And everything I listed in my comment came from the article: > On the day of the concert, you feel sick and it’s raining outside. You know that traffic will be worse because of the rain and that you risk getting sicker by going to the concert. So they did cover those elements. The point of the article is to discuss the sunk cost fallacy, which they did. The fallacy is choosing to go to the concert because you spent the $50 on the ticket, disregarding the other considerations or weighing them below the sunk cost in importance. If you go despite the issues they mention but because you think it's going to be worth it (in enjoyment, uniqueness, whatever) then you've made a decision that wasn't based on the fallacy. Which is what they discuss in the article.

manwe150 5y ago

In your question, it sounds like you only want to see this concert live once, so your choice is between seeing it now “for free,” but sick, or later for $50. That is not a sunk cost fallacy, since the current marginal cost is lower to see them now. But there are many factors that can be a sunk cost fallacy too. If you hope to go again anyways, for example, then that future interest is not a factor now. Or if you pay more than $50 extra (or refuse to pay less than $50 extra) to get to the show tonight. Since if you incur a new marginal cost by being sick, you must consider that cost in relation to the expected future cost of the show, not the money already invested in it. So to avoid the sunk cost fallacy, you should always be willing to pay an extra $50 (in expected total), even after spending multiples of that (unexpectedly), and then still not go if someone would charge an extra $51 unexpectedly.

djmips 5y ago

I had this decision in 2007 to see Daft Punk or take care of a tree that had fell at my home. In hind-sight I'd much rather have gone to the concert. This analogy is terrible.