A few weeks ago, Pope Benedict XVI announced he was resigning. His decision shocked the world, because popes don’t usually step down. And that got me thinking about the decision to walk away from things you have committed to in the past.
Economists call the amount of time, money and effort that you have put into something in the past a “sunk cost.” That is, that time, money and effort is gone and you can’t get it back. So, economists argue that you should make decisions about whether to continue with something based only on whether a continued investment would lead to success and not based on the past.
Here’s a simple example. Imagine you hear about a great play at a local theater. You stand on line at the box office for an hour and pay a lot of money for good seats. You get to the show and the first act is horrible. The script is dull. The actors are lifeless. The jokes fall flat. Should you leave the show at intermission?
Many people will decide to stay to see the second act. They feel like if they leave at intermission, they will have wasted the time and money they spent.But imagine that you were at the same play, only the tickets had been given to you the day before by a friend who had a conflict with the date and couldn’t go. Now you have less invested in staying, and you feel much more willing to leave.
The key idea is that if you would be willing to leave the play if you hadn’t paid any money or put any time into getting the tickets, then you should also leave even if you waited on line and paid a lot. The time and money that you put into getting the tickets is gone. You can’t get them back. So, why compound the problem by spending even more time there?
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The economists may very well be right. University of Michigan psychologist Richard Nisbett, Ph.D. and his colleagues studied the behavior of college professors. He asked them lots of questions about their willingness to stop failing research projects after they had been working on those projects for a long time. The ones who stuck with long-term projects because of the past investment of time and effort were less successful than the ones who were willing to give up on research projects that were not going well. The quitters were actually winning.What does this mean for you?
Take a look at the things you are doing in your life—your job, your relationships, your hobbies, your friendships. Remember that your time is one of the most valuable resources you have. Try to spend that time on the things that are going to help you make your life happy and fulfilling.When aspects of your life are not giving you pleasure and are not adding meaning to your life, ask yourself why you are still doing them. Some of them, of course, may be a result of the responsibilities you have. You may have a family member that you continue to spend time with just because it is an obligation. And that is probably a good thing.
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But if you find that the only reason you are still doing something is that you have done it for a long time, then you are focused on sunk costs. In that case, you should think seriously about giving up and spending your time (and effort and money) on something else.