After digging for half an hour, Lilly the Labrador gets hold of the old, decrepit bone she had buried last month. But as the pup settles back to savor the treat, her owner leans down to give her a new bone, one still juicy with meat. Easy decision. Lilly quickly disregards the inferior prize and engulfs the more nutritious one.
The strange thing, according to our research, published in the Psychological Bulletin, is that such a choice isn't as obvious for people. For example, if you have had an unfulfilling job or unhealthy relationship for years and then a new opportunity arises, do you jump on it? There's a good chance you'll find yourself saying: It's been 10 years, how can I leave now? Or worse, after a day of gambling, you start chanting the Las Vegas mantra: I can't stop playing roulette now; I've lost $1,000.
People fall for the sunk cost fallacy--the notion that investment justifies further cost, while less advanced organisms such as dogs, mice and ants are more likely to cut their losses when faced with impending failure. They haven't learned, and therefore don't overuse, the don't waste rule. They behave as rational beings should, trying to maximize future benefits and minimize future costs.
So the next time you find yourself clinging to a sinking ship, ask yourself: What would Lilly do?
