The Sunk Cost Fallacy

Chris_Sanders

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https://youarenotsosmart.com/2011/03/25/the-sunk-cost-fallacy/

The Misconception: You make rational decisions based on the future value of objects, investments and experiences.

The Truth: Your decisions are tainted by the emotional investments you accumulate, and the more you invest in something the harder it becomes to abandon it.


In psychologist Daniel Kahneman’s book, Thinking Fast and Slow, he writes about how he and his colleague Amos Tversky through their work in the 1970s and ‘80s uncovered the imbalance between losses and gains in your mind. Kahneman explains that since all decisions involve uncertainty about the future the human brain you use to make decisions has evolved an automatic and unconscious system for judging how to proceed when a potential for loss arises. Kahneman says organisms that placed more urgency on avoiding threats than they did on maximizing opportunities were more likely to pass on their genes. So, over time, the prospect of losses has become a more powerful motivator on your behavior than the promise of gains. Whenever possible, you try to avoid losses of any kind, and when comparing losses to gains you don’t treat them equally. The results of his experiments and the results of many others who’ve replicated and expanded on them have teased out a inborn loss aversion ratio. When offered a chance to accept or reject a gamble, most people refuse to make take a bet unless the possible payoff is around double the potential loss.

Behavioral economist Dan Ariely adds a fascinating twist to loss aversion in his book, Predictably Irrational. He writes that when factoring the costs of any exchange, you tend to focus more on what you may lose in the bargain than on what you stand to gain. The “pain of paying,” as he puts it, arises whenever you must give up anything you own. The precise amount doesn’t matter at first. You’ll feel the pain no matter what price you must pay, and it will influence your decisions and behaviors.
 
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Chris_Sanders

Chris_Sanders

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Specifically this fallacy addresses the unwillingness to give up on something that hasn't proven to be successful. It just needs more time, a better chance, and then it will become what we thought we were getting originally.

Keim is wretched with this btw.

Gresham being signed twice

Amos Jones never being fired

Signing Iupati again
 

iLLmatiC

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Speaking for myself, the initial investment for Rosen isn't the sole reason why I don't want to replace him with Murray. I think Rosen can be a good QB, I'd like to surround him with a good coaching staff this year to see what he has. If he regresses or doesn't progress enough then I'm more than content with cutting our losses with him. The right decision, in my opinion, is to either draft an elite defensive player or trade down and obtain more assets.
 

unseenaz

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Speaking for myself, the initial investment for Rosen isn't the sole reason why I don't want to replace him with Murray. I think Rosen can be a good QB, I'd like to surround him with a good coaching staff this year to see what he has. If he regresses or doesn't progress enough then I'm more than content with cutting our losses with him. The right decision, in my opinion, is to either draft an elite defensive player or trade down and obtain more assets.
ditto... murray isn't an andrew luck "can't miss prospect" type of QB. take any excuses away from rosen not being able to succeed by building a competent team around him. if he's not the guy, readdress it in 2 years from now.

if "andrew luck" was in this draft i'd 100% be on board with drafting him.
 

Veer

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If Murray completes 60% of his passes and throws more TDs than INTs in his rookie season, nobody on this forum will know who Josh Rosen was a year from now. Because I don't see Josh Rosen walking into Miami, Washington or New York and play very well in his first year, that's if he doesn't have to sit behind a veteran starter for most of the season.
 

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If Murray completes 60% of his passes and throws more TDs than INTs in his rookie season, nobody on this forum will know who Josh Rosen was a year from now. Because I don't see Josh Rosen walking into Miami, Washington or New York and play very well in his first year, that's if he doesn't have to sit behind a veteran starter for most of the season.

He could certainly win in Washington esp in that crapbag division. They were on their way to winning the division before smith got hurt. Also rumor is from La Canfora that Washington wants to move up to 3 to draft Haskins.


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BirdDroppings

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The problem is that it's often hard to know when something is a bad investment or just needs more time. Most businesses run a loss their first and second years before breaking even and eventually becoming profitable. That doesn't mean they are sunk costs and you should close shop after a year. Likewise, most professional athletes are net negatives as rookies. Some are terrible and end up hall of famers. Sunk costs exist. So do long term investments. How do you determine which is which accurately?
 

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one factor in sunk cost here:

current emotional commitment in Josh Rosen's success

my assumption is if you are on this board -- you are a dedicated fan, and that usually means making an emotional commitment in the team.

I know I really want Rosen to be the guy for the Cardinals -- a true QBOF that can play at a high level --- an emotional commitment in his success

I think that can be hard to abandon after a single year
 
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Chris_Sanders

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While it can apply to Rosen I believe it definitely has applied to Nkemdiche (this was so me) and so many other instances.

I believe Keim is incredibly guilty of this so it may be tough to get him to move on from Rosen even if he believes Murray has a better long term upside.
 

ajcardfan

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I will use a fishing analogy.... There are times when you would catch more fish if you just cut bait on a tangled line. But, I admit, I have gone through ridiculous contortions to free up my line with fish jumping all over the lake. I know I am being stupid, if my goal is to catch fish, but I still do it.

So, yes, I am not a great fisherman!
 

b8rtm8nn

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While it can apply to Rosen I believe it definitely has applied to Nkemdiche (this was so me) and so many other instances.

I believe Keim is incredibly guilty of this so it may be tough to get him to move on from Rosen even if he believes Murray has a better long term upside.

Keim is 'fighting like hell' to turn this team around, so this may be the year that he would make changes uncharacteristic of his past.
 

AZCrazy

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Somehow a psychological paper will turn into a Murray thread. That's okay, it really is all we have to talk about at the moment.
My only concerns about Murray in the context of sunk cost is that I believe Rosen has the talent to be good, given an equal chance.
If we draft Murray, it robs us of being able to make any significant improvement to the team that he would be joining. The young guys that
come in and succeed quickly are those that fall into a great roster like Goff and Mahomes.
The top pick is the biggest chunk of currency a team can hold. It could be turned into two first round picks or four additional second round picks without
even trying.
 

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https://youarenotsosmart.com/2011/03/25/the-sunk-cost-fallacy/

The Misconception: You make rational decisions based on the future value of objects, investments and experiences.

The Truth: Your decisions are tainted by the emotional investments you accumulate, and the more you invest in something the harder it becomes to abandon it.


In psychologist Daniel Kahneman’s book, Thinking Fast and Slow, he writes about how he and his colleague Amos Tversky through their work in the 1970s and ‘80s uncovered the imbalance between losses and gains in your mind. Kahneman explains that since all decisions involve uncertainty about the future the human brain you use to make decisions has evolved an automatic and unconscious system for judging how to proceed when a potential for loss arises. Kahneman says organisms that placed more urgency on avoiding threats than they did on maximizing opportunities were more likely to pass on their genes. So, over time, the prospect of losses has become a more powerful motivator on your behavior than the promise of gains. Whenever possible, you try to avoid losses of any kind, and when comparing losses to gains you don’t treat them equally. The results of his experiments and the results of many others who’ve replicated and expanded on them have teased out a inborn loss aversion ratio. When offered a chance to accept or reject a gamble, most people refuse to make take a bet unless the possible payoff is around double the potential loss.

Behavioral economist Dan Ariely adds a fascinating twist to loss aversion in his book, Predictably Irrational. He writes that when factoring the costs of any exchange, you tend to focus more on what you may lose in the bargain than on what you stand to gain. The “pain of paying,” as he puts it, arises whenever you must give up anything you own. The precise amount doesn’t matter at first. You’ll feel the pain no matter what price you must pay, and it will influence your decisions and behaviors.


I give you the Razzle carnival game.

[tube]
xc_hide_links_from_guests_guests_error_hide_media
 

tnmike

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https://youarenotsosmart.com/2011/03/25/the-sunk-cost-fallacy/

The Misconception: You make rational decisions based on the future value of objects, investments and experiences.

The Truth: Your decisions are tainted by the emotional investments you accumulate, and the more you invest in something the harder it becomes to abandon it.


In psychologist Daniel Kahneman’s book, Thinking Fast and Slow, he writes about how he and his colleague Amos Tversky through their work in the 1970s and ‘80s uncovered the imbalance between losses and gains in your mind. Kahneman explains that since all decisions involve uncertainty about the future the human brain you use to make decisions has evolved an automatic and unconscious system for judging how to proceed when a potential for loss arises. Kahneman says organisms that placed more urgency on avoiding threats than they did on maximizing opportunities were more likely to pass on their genes. So, over time, the prospect of losses has become a more powerful motivator on your behavior than the promise of gains. Whenever possible, you try to avoid losses of any kind, and when comparing losses to gains you don’t treat them equally. The results of his experiments and the results of many others who’ve replicated and expanded on them have teased out a inborn loss aversion ratio. When offered a chance to accept or reject a gamble, most people refuse to make take a bet unless the possible payoff is around double the potential loss.

Behavioral economist Dan Ariely adds a fascinating twist to loss aversion in his book, Predictably Irrational. He writes that when factoring the costs of any exchange, you tend to focus more on what you may lose in the bargain than on what you stand to gain. The “pain of paying,” as he puts it, arises whenever you must give up anything you own. The precise amount doesn’t matter at first. You’ll feel the pain no matter what price you must pay, and it will influence your decisions and behaviors.
I'm a firm believer that a lot of people have several chances to become rich in their lifetime. They just don't realize the opportunity or they are too scared to take the chance.
 

football karma

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I give you the Razzle carnival game.

[tube]
xc_hide_links_from_guests_guests_error_hide_media


should I be concerned that the guy was wearing a Kangol hat...……….
 

Mainstreet

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I will use a fishing analogy.... There are times when you would catch more fish if you just cut bait on a tangled line. But, I admit, I have gone through ridiculous contortions to free up my line with fish jumping all over the lake. I know I am being stupid, if my goal is to catch fish, but I still do it.

So, yes, I am not a great fisherman!

Always take at least a couple of equipped fishing rods.

There is nothing worse than breaking a rod or reel and having to call it a day. I made this mistake when I was younger. Never again.
 

Jetstream Green

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Here's another interesting thought for contemplation when reviewing coaches or players. They did a study some years back on military generals where the stakes are even higher and no matter the scale of possible defeat... when presented with a situation, most generals did the same reaction 8 out of 10 times again :)
 

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