244 - Quit - Annie Duke
You Are Not So Smart
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The Sunk Cost Fallacy and the Endowment Effect
Richard Thaler, who helped create the research that has lasted to this day, helped you with the material. The thing that he really pushed me on was to sort of bring these things together into this umbrella concept that has to do with mental accounting. So what that means is like if I buy a stock at 50 and it goes to 75 and goes back down to 60 in my mental account, I'm in the losses,. That's not the way I experience it because I was at 75. And so we want to keep the account open so that we don't have to take those losses.
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