When We Are Not Willing To Put It Down
Sometimes we need to give up the ghost, there are things in the past that are better off being left behind and us moving forward. We had discussed why you should not look back once you’ve made the decision to move on from something.
But of course before you can actually decide to leave things, one needs to be able to make conscious decisions to separate yourself in the first place, the willingness to do this to perform this cleavage, there are a few hurdles in the human psyche that prevent it from happening.
The first is sunk cost fallacy which we have discussed before on a number of occasions. To quickly recap, sunk cost fallacy is where by a person has dedicated so much time, resources and attention towards something or someone that when the time comes and you discover something is no longer right for you, you are unwilling to leave because of all the time, effort, attention you have spent on something. So you dedicate more resources towards something that you know is a mistake.
Loss Aversion Bias: When We Can’t Cut Things Out
The other hurdle that prevents us from leaving is called the loss aversion bias. Now there have been countless studies showing that your average person is much more adverse to loss then they are open to gains. Another way to put this is that most people are unwilling to cut losses when the time for decisive action is called upon. Part of the reason being is that once they have been involved in something and things begin heading south, the more south it goes, the more painful it is to leave. What gets left is a futile hope that things will get better, a hope that leaves you powerless to your circumstances.
Now people stay in that situation because when you decide to leave, that actualizes your losses. So you see the loss aversion bias is a vicious cycle, someone starts taking losses and they first are in denial, hoping it will get better, but the only thing that happens is things get worse making cutting off the relationship (with a thing or person) more painful, fueling further false hope and so on and so forth.
This is the fate of someone unwilling to cut their losses, lives have been ruined by people unable to leave a failed (and burning) investment, business, career or relationship. So be careful…
Next time we will work towards tying sunk cost fallacy, loss aversion bias and giving up the ghost together.
Kingston S. Lim
March 31st, 2021