Victorious Surrender – avoid the sunk cost fallacy in 3 steps

“I will be sending you my resignation this afternoon.”

If only it were as easy as hitting “send” on an email.

Walking away can be tough, especially after significant investment.

That Sinking Feeling

One of the tough parts of walking away is emotionally and mentally detaching from what you leave behind. In behavioural economics terms, your previous investments in a decision are known as sunk costs.

The tendency to be overly influenced by sunk costs is known as the sunk cost fallacy.

The fallacy at play could look like persisting with a job that is no longer aligned with your long term goals. You may feel anchored there because of the years you have already put in.

While investments in time and energy made during those years should not be ignored completely, our brains have a hard time with letting go. This can apply even when you’re attempting to let go of something intangible like the reputation you have built at an employer.

This challenge can keep us in an arrangement that calls us to keep investing in something that is holding us in place, or, worse, taking us away from our higher goals.

Pulling the Plug

The Luck Thought Experiment is a scenario where you imagine yourself in your current situation as part of some lucky break. The idea behind this is to detatch yourself from the previous investments and think about how things might look from this perspective.

For example, you might feel like a relationship has started pulling you away from your long-term goals. However, walking away would feel like throwing away years of emotional investment.

You arrive at a dilemma: “Should I stay, or should I go?”

The Luck Thought Experiment allows you to temporarily suspend your previous investments from the equation to see if you arrive at a similar conclusion after removing yourself from the inertia of sunk costs.

Quitting can be for winners, especially when that move can release you from commitments that are no longer serving you and free you up to pursue your long-term goals.

A Decision-Making Toolkit

In my decision-making guide, From Dilemmas to Decisions, I show you how you can use the Luck Thought Experiment and five other decision-making tools to help you make decisions with less anxiety and fewer regrets.

But, before we go into the book, here are some actionable insights.

Takeaways

In order to counteract the decision inertia of the sunk cost fallacy, try the following:
🔨 The Luck Thought Experiment: imagine you had arrived at your current situation by some lucky break. Do you feel compelled to continue on your present trajectory?
🔨 Connect with the future: think about the future costs and benefits of staying the course.
🔨 Bonus tip – talk to someone: conversation can provide a distanced perspective from your existing path and freedom from the sunk costs.

If you enjoyed reading this, you may also enjoy:
* tough decisions of the heart
* When Your Job Is Just Comfortable Enough to Stay Stuck
* when happy ends turn bad