Re:Ignore Sunk Costs (2009)
by DubiousPusher on Saturday January 04, 2020 @03:12PM
(#21957136)
I think you and the blog post author are making the same mistake. You're just not putting a dollar value on these social costs. If the blog author valued their partner's feeling they would enumerate upsetting them as a cost and it wouldn't be so clear that you're earning $500. But rather you're earning $500 less the cost to your personal relationship.
This is a similar mistake to failing to price other intangibles like risk.
It’s an odd mistake to make, since it implicitly recognizes that someone may value the experience of seeing the concert more than $500, but fails to recognize that someone may value their close social relationships more than $500.
It’s not rational to choose receiving $500 and having your wife and friends be upset at you, unless you value the $500 more than having your wife and friends be on good terms with you. That’s a tautology, of course, but apparently it needs to be said.
In the paper, the "Camping Rainstorm" example is similar in spirit. Instead of the protagonist suffering what the author calls a "diachronic misfortune," maybe in having no plans for the rest of the night, maybe in suffering a cooperation loss vis-a-vis the spouse, etc., they honor the sunken cost.
† I'd probably argue it's guaranteed.