Don’t let sunk costs guide you

We Only Lose More While Trying To Derive Utility From Things That Are Not Useful Or Desirable Any Longer


I envy banks when they write off bad loans. “Some numbers aren’t looking neat, let’s erase them.” I can’t throw away even my son’s half-eaten sandwich.

That sandwich is a sunk cost. I have eaten mine, and I am feeling full. He wants only half of his, and eating the leftovers does not increase my well-being. Yet, I finish it. It seems such a shame to throw away food. Is shame rational?

Guilt awaits me in my room every time I go to see my parents. There, in a steel rack, are books I bought in college. Dickens, Tolstoy, Chekhov, Dostoevsky, Victor Hugo… I probably read only a third of them. Then, I got a full-time job, moved out, and now the books are 20 years old. Their cellophane wraps have fused to the covers. The pages are browning.

I have often considered giving away the books before they crumble. Almost all of them can be downloaded and read for free in the leisurely, retired future of of my dreams. But Little Dorrit and The Hunchback and The Brothers Karamazov watch me with undisguised dismay. There’s Mikhail Sholokhov’s And Quiet Flows The Don in two hardbound volumes, waiting to be opened.

I tell myself I will take a longer break from work next time and read at least one of those books sitting upstairs in the winter sun. But the breaks from work get shorter each year, and less frequent. The books are a guilt-inducing sunk cost. Is guilt rational?

Two months ago, my phone company gave me 5GB data for the price of one, and did me more harm than good. All I need is 1GB every month. I check email, download and read a few articles in Opera browser, and keep the data switched off through most of the day. At the end of each month I update my apps with the leftover data. But with 5GB in my account I thought of ways to put it to use. That stole some time. I played the songs I like on Youtube. That stole some more time, but did not dent the data enough. Finally, I downloaded a lot of Ted Talks and other video lectures for the future, at a considerable expense of time.

The data was a sunk cost. It would have made no difference to my pocket whether I used only 1GB or 2GB or all 5GB, but in trying to maximise the gain I lost something far more valuable — time.

When (if) I eventually compel myself to hear all those lectures, I will be losing more time. Even if they are great, they are not essential to my day or my life; would it be wise of me to watch them?

Life is punctuated with sunk costs like eat-all-you-like buffets. Maybe you have a pair of pointy-toed shoes that are a torture to wear but cannot be given away because you paid an unreasonable sum for them. You will keep trying to derive value from them till you feel the expense has been justified, or they crack with age.

My car has done only 14,000km in four-and-a-half years. Every October, at the time of the annual service, the customer service guy jokes about it and advises me to drive more. He says I derive only 30% value from the service charges by driving 3,000km in a service interval of 10,000km. Not really. The car is a sunk cost, but every additional kilometre I drive costs extra money. So, when I go to the workshop with only 3,000 additional kilometres on the clock, I have saved the expense of driving 7,000km.

Besides things, relationships have their sunk costs too. Something sustained purely by convention or societal obligation is a sunk cost.

Sunday night, I wasted a couple of hours trying to find a use for a four-year-old tablet. It ran Android 4.0 on a single core and just 512MB RAM. It stuttered on any additional app but would not die. The battery still held charge for a day. It seemed such a shame to kill it.

I decided to make it a reader although the screen was dull and grainy. After several attempts I managed to download Play Books, and then very slowly, my library of ebooks also appeared on it. But every attempt to read a book ended in a crash. Two hours wasted. Two hours in which I could have read or played with my son or even watched one of those waiting Ted videos.

The tablet was a sunk cost the day it came home. It was most irrational of me to discover uses for it when it was well past its prime. On Monday morning, I pried it open with a screwdriver, separated the battery, smashed parts of the circuit board labeled Hynix, assuming one of them would be the memory, and threw everything away. The operation took only five minutes and I felt good after it. Free.



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