20VC: Shopify Founder Tobi Lütke on Why Micromanagement is Good | Why You Will Learn More From Studying World of Warcraft Guilds Than You Will Companies | Why Happiness is BS; Lessons on Marriage, Fatherhood & Decision-Making Quality
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How to Deal with Sunk Cost Fallacy
The sunk cost fallacy is a logical fallacy where people feel compelled to continue with a decision or course of action simply because they have invested time, effort, or resources into it. This fallacy arises from a desire to be right and have others validate our decisions, leading us to prioritize the opinions of others over our own. However, if we want to prioritize truth and make optimal decisions, we should not let sunk costs influence our choices. Instead, we should constantly evaluate new information and be open to changing our minds if it aligns with our current understanding. By embracing curiosity and allowing for disagreement, we create opportunities to learn and improve our decision-making. Ultimately, the goal is to make the best possible choices in each moment, rather than trying to justify past decisions based on sunk costs. By breaking free from the sunk cost fallacy, we empower ourselves and avoid giving others too much influence over our value system.
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