Title: The Sunk Cost Fallacy – You Are Not So Smart
Headings: You Are Not So Smart
You Are Not So Smart
The Sunk Cost Fallacy
You Are Not So Smart – The Book
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Content: But you don’t think in that way. Your loss aversion system is always vigilant, waiting on standby to keep you from giving up more than you can afford to spare, so you calculate the balance between cost and reward whenever possible. He speculates that this is why you accumulate free tchotchkes you don’t really want or need and why you find it so tempting to accept shady deals if they include free gifts or choose decent services that offer free shipping over better services that do not. When anything is offered free of charge, Ariely believes your loss aversion system remains inactive. Without it, you don’t weigh the pros and cons with as much attention to detail as you would if you had to factor in potential losses. Source: http://www.kimclips.com
This is why marketing and good salesmanship is often all about convincing you what you want to buy is worth more than what you must pay for it. You see something as a good value when you predict the pain of loss will be offset by your joy of gain. If they did their job well, somewhere in your Byzantine perception you feel as though you won’t lose at all. Emotionally, you will come out ahead.