Investment and Loss Traps: Why We Struggle to Let Go (2 in 1)

Summary

This book consists of two titles:

- The Sunk Cost Fallacy: The term "sunk cost" refers to resources that have already been expended and cannot be recovered. Examples include the money spent on a non-refundable ticket, the hours devoted to a project that’s unlikely to succeed, or the emotional energy invested in an unhealthy relationship. Once these resources are gone, they should not factor into future decision-making. However, human nature frequently drives people to consider these costs as if they can be salvaged, causing them to persist in unproductive pursuits.

- The Status Quo Bias: The Status Quo Bias is a psychological phenomenon in which individuals have a preference for the current state of affairs, often resisting change even when the alternatives might be more beneficial. This bias manifests in various aspects of life, from personal decisions to larger social, political, and economic systems. People tend to prefer things staying the same because it feels safer and more familiar, even if change could lead to improved outcomes. It is a powerful force that influences how we make choices, how we interact with others, and even how societies evolve over time.