YANSS Podcast 035 – Sunk Costs and the Pain of Vain

The Topic: The Sunk Cost Fallacy

The Episode: DownloadiTunesStitcherRSSSoundcloud

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Every once in a while you will ask yourself, “I wonder if I should quit?”

Should you quit your job? Should you end your relationship? Should you abandon your degree? Should you shut down this project?

These are difficult questions to answer. If you are like me, every time you’ve heard one of those questions emerge in your mind, it lingered. It began to echo right as you woke up and just as pulled the covers over your shoulders. In the shower, waiting in line, in all your quiet moments – a question like that will appear behind your eyes, pulsating like a giant neon billboard until you can work out your decision.

Oddly enough, as a human being, that decision is often not made any easier when quitting is the most logical course of action. Even if it is obvious that it is no longer worth your time to keep going, your desire to plod on and your reluctance to quit are both muddled by an argumentative loop inside which you and many others easily get stuck.

The same psychological hooks that cost companies millions of dollars to produce products obviously destined to fail can also keep troops in harm’s way long past the point when the whole war effort should be brought to an end. It’s a universal human tendency, the same one that influences you to keep watching a bad movie instead of walking out of the theater in time to catch another or that keeps you planted in your seat at a restaurant after you’ve been waiting thirty minutes for your drinks. If you reach the end of the quest, you think, then you haven’t truly lost anything, and that is sometimes a motivation so strong it prolongs horrific, bloody wars and enormously expensive projects well past the point when most people involved in efforts like those have felt a strong intuition that no matter the outcome, at this point, total losses will exceed any potential gains.

In this episode of the You Are Not So Smart Podcast, we explore the sunk cost fallacy, a strangely twisted bit of logic that seems to pop into the human mind once a person has experienced the pain of loss or the ickiness of waste on his or her way toward a concrete goal. It’s illogical, irrational, unreasonable – and as a perfectly normal human being, you act under its influence all the time.

LINKS

DownloadiTunesStitcherRSSSoundcloud

Previous Episodes

Boing Boing Podcasts

Cookie Recipes

Liberal or conservative? Brain responses to disgusting images help reveal political leanings

The Genetic Fallacy

More on The Genetic Fallacy

SOURCES

  • Ariely, D. (2009). Predictably irrational, revised and expanded edition: The hidden forces that shape our decisions. Harper. (Amazon link)
  • Arkes, Hal R., and Peter Ayton. “The Sunk Cost and Concorde Effects: Are Humans Less Rational than Lower Animals?” Psychological Bulletin 125.5 (1999): 591-600. Print. (pdf)
  • Burthold, G. R. (2008). Psychology of decision making in legal, health care and science settings. Gardners Books. (Google Books link)
  • Busch, Jack. “Travel Zen: How to Avoid Making Your Vacation Seem Like Work.” Primer Magazine. Primer Magazine, Jan. 2009. Web. Mar. 2011. (link)
  • Gaming Can Make a Better World. By Jane McGonigal. TED Talks. TED Conferences, LLC, Feb. 2010. Web. Mar. 2011. (link)
  • Godin, Seth. “Ignore Sunk Costs.” Seth’s Blog. Typepad, Inc., 12 May 2009. Web. Mar. 2011. (link)
  • Höffler, Felix. “Why Humans Care About Sunk Costs While (Lower) Animals Don’t.” The Max Planck Institute for Research on Collective Goods, 31 Mar. 2008. Web. Mar. 2011. (pdf)
  • Indvik, Lauren. “FarmVille” Interruption Cited in Baby’s Murder.” Mashable. Mashable Inc., 28 Oct. 2010. Web. Mar. 2011. (link)
  • Kahneman, D. (2011). Thinking, fast and slow. Farrar, Straus and Giroux. (Amazon link)
  • Kushner, David. “Games: Why Zynga’s Success Makes Game Designers Gloomy.” Wired. Conde Nast Digital, 27 Sept. 2010. Web. Mar. 2011. (link)
  • Lehrer, Jonah. “Loss Aversion.” ScienceBlogs. ScienceBlogs LLC, 10 Feb. 2010. Web. Mar. 2011. (link)
  • Schwartz, Barry. “The Sunk-Cost Fallacy Bush Falls Victim to a Bad New Argument for the Iraq War.” Slate. The Slate Group, 09 Sept. 2005. Web. Mar. 2011. (link)
  • Shambora, Jessica. “‘FarmVille’ Gamemaker Zynga Sees Dollar Signs.” CNN Money. Cable News Network, 26 Oct. 2009. Web. Mar. 2011. (link)
  • Vidyarthi, Neil. “City Council Member Booted For Playing Farmville.” SocialTimes. Web Media Brands Inc., 30 Mar. 2010. Web. Mar. 2011. (link)
  • Walker, Tim. “Welcome to FarmVille: Population 80 Million.” Independent. Independent Digital News and Media, 22 Feb. 2010. Web. Mar. 2011.
  • “Why Zynga’s Success Makes Game Designers Gloomy | Discussion at Hacker News.” Hacker News. Y Combinator, 7 Oct. 2010. Web. Mar. 2011 (link)
  • Wittmershaus, Eric. “Facebook Game’s Cautionary Tale.” GameWit. Press Democrat Media Co., 04 Aug. 2010. Web. Mar. 2011. (link)
  • Yang, Sizhao Zao. “How Did FarmVille Take over FarmTown, When It Was Just a Exact Duplicate of FarmTown and FarmTown Was Released Much Earlier?” Quora. Quora, Inc., 01 Jan. 2011. Web. Mar. 2011. (link)
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YANSS Podcast – Episode Eight – The Psychology of Video Games

The Topic: Video Games

The Guest: Jamie Madigan

The Episode: Download – iTunes – Stitcher – RSS – Soundcloud

Last of Us Friend or Foe

A scene from “The Last of Us”

“The Last of Us” is a video game, a work of interactive art, and a question will arise in the back of your mind while playing, “What would I do in this situation?” and the answer will make you feel emotions no other art form can elicit.

The game is set in a post-apocalyptic United States, 20 years after the fall of mankind, in a world nature has mostly reclaimed, where resources are few and trust is scarce. Hope is the commodity in shortest supply. Most everyone has given up on rebuilding the old world. This is just how it is now. Every encounter with strangers pings that most primal of judgments under uncertainty: “Is this a potential friend or foe?”

Familiar? Sure, it’s a theme being explored all over in fiction. Something in the zeitgeist has us fretting over these things again, but in a game you have the opportunity to actually test yourself in a virtual reality, to see what you would do when the stakes are as high as possible. Would you trust others? Would you help strangers? Would you kill to survive?

In addition, “The Last of Us” explores something the gaming world calls ludonarrative dissonance. Many modern games have detailed stories with great writing and well-acted scenes interspersed between what amounts to bursts of mass murder. It can make a player feel like his or her agency in the world has been stolen by the storyteller, that the characters you are asked to portray live in two realities, one you control and one you do not. This can feel really off-putting when the characters are jaunty, smarmy, and noble in the cutscenes, but then you are asked to use those people to do terrible things. In an effort to solve this problem, Naughty Dog, the developers of “The Last of Us”, crafted an experience where you and the character feel justified when pushed to do harm, but afterward you, the gamer, feel disgusted with yourself and horrified by the power of the situation to change your behavior and shift your moral center. You find yourself quickly learning to avoid violence – a behavior I was astonished to see evoked in myself inside a game world, and was thrilled to experience. That’s something you won’t get watching “Breaking Bad.”

Watch a teaser trailer showing a friend-or-foe scenario here: Link

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In this episode of the YANSS podcast, we explore games and their potential to reveal our self delusions. I interview Jamie Madigan, the curator of psychologyofgames.com, who writes about the behaviors and cognitions that games both exploit and uncover. It’s a great interview. We discuss everything from the motivational nudging in “Candy Crush Saga” to the power of endowed progress when endorsing people on LinkedIn. Please forgive us for geeking out so hard during it. I promise, non-gamers will learn plenty in this episode. Links to the things mentioned in the episode are at the bottom of this post.

After the interview, as in every episode, I read a bit of self delusion news and taste a cookie baked from a recipe sent in by a listener/reader. That listener/reader wins a signed copy of the new book, You Are Now Less Dumb, and I post the recipe on the YANSS Pinterest page. This episode’s winner is Violet Sinnarkar who submitted a recipe for white chocolate oatmeal cookies. Send your own recipes to david {at} youarenotsosmart.com.

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White Chocolate Oatmeal Cookies

Links:

Download – iTunes – Stitcher – RSS – Soundcloud

Boing Boing Podcasts

Psychology of Games

Papers, Please

Spent

Newsgaming

Underground Railroad Game

The Walking Dead 

Narco Guerilla 

The Last of Us

Candy Crush Youtube Video 1

Candy Crush Youtube Video 2

Candy Crush Youtube Video 3

Candy Crush Youtube Video 4

The study concerning the cognitive load of poverty

Complete quests for riches and glory to help herald the paperback release of You Are Not So Smart

Photo illustration of Graham Clark by Brad Clark

Amazon | Barnes & Noble | iTunes |IndieBound | Books-A-Million | Audible

Sample Chapter | Get Your Digital Copy Signed | Free Signed Bookplates

Trailer One | Trailer Two

Below these words, you will find 10 quests, each offering a prize should you complete the challenges therein.

The You Are Not So Smart book was published and then released into the wild about a year ago. That means it is time for it transmutate into paperback form, and I’m proud to announce the paperback version is now on shelves just about everywhere books hide. Also, if you live in the UK or one of the many countries that buys books from UK marketplaces, you can now get the You Are Not So Smart book free of hassle with a new, dapper cover design.

To promote this wondrous occasion, I want to send you on some quests. Should you succeed, you will be handsomely rewarded. Some will be easy, and some will be trials of will and skill. Those proved worthy will be featured in a future posting. Here they are:

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The Sunk Cost Fallacy

The Misconception: You make rational decisions based on the future value of objects, investments and experiences.

The Truth: Your decisions are tainted by the emotional investments you accumulate, and the more you invest in something the harder it becomes to abandon it.

You can learn a lot about dealing with loss from a video game called Farmville.

You have probably heard of this game. In 2010, one in five Facebook users had a Farmville account. The barrage of updates generated by the game annoyed other users so much it forced the social network to change how users sent messages. At its peak, 84 million people played it, a number greater than the population of Italy.

Farmville has shrunk since then. About 50 million people were still playing in early 2011 – still impressive considering the fantasy megagame World of Warcraft boasts about a quarter as many players.

So, it must be really, really fun. A game with this many players must promise potent, unadulterated joy, right? Actually, the lasting appeal of Farmville has little to do with fun. To understand why people commit to this game and what it can teach you about the addictive nature of investment, you must first understand how your fear of loss leads to the sunk cost fallacy.

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