Overcoming the Sunk Cost Fallacy

Opportunity Purchase Theory (OPT)
Geoffrey Hale

We purchase opportunity. We do not purchase tickets to an event, for example; We purchase the opportunity to attend an event. There is no binding contract, just a use-it-or-lose-it de facto contract with the universe. We are not obligated to limit ourselves to participating in the opportunity we have purchased.

The above primer is intended to enable you to approach sunk cost situation more rationally. For example, you have purchased a non-refundable $65 ticket for new year’s eve on a party bus with people I don’t know, but a good friend asks you to come to his brother’s house party with good people in Providence. My heart yearns for the high probability of good people per the good friend’s description as opposed to the random probability of good people on a party bus with people I don’t know.

The brain’s tendency in this situation is towards stupidity – it drives an emotional reaction that suggests an incomplete emotional acceptance of sunk cost. If instead we approach this situation with the mindset that we purchased and now have only the opportunity to spend new year’s eve on a party bus then we have framed this component in a more logically accessible mental space. In that space, we can more emotionally unbiasedly evaluate the two opportunities without the remotest consideration of the ticket that cost $65. In this case, our biological system would drive us to Providence for a superior new year’s eve.