How Sunk Cost Fallacy Applies To Love
RENEE MONTAGNE, HOST:
And now for Valentine's Day, we have an economic idea wrapped in a love story. Here's Jacob Goldstein from our Planet Money team.
JACOB GOLDSTEIN, BYLINE: When Megan McArdle was in her early 30s, she met a fantastic guy.
MEGAN MCARDLE: Every time we went on a date, it was great. It was just easy. I totally thought this one could be the one.
GOLDSTEIN: He was handsome and fun. On weekends, they made pancakes.
MCARDLE: Everything was great. It was just this one, very small thing.
GOLDSTEIN: That thing was marriage. They never talked about it, but Megan assumed things were headed in that direction. They moved in together. A few years passed. And one day, Megan told her boyfriend that her family had actually started scoping out a potential wedding venue for them.
MCARDLE: And I mentioned this. He said, you know, I think it's sort of sweet. And I said, well, are you - they think we're getting married. Are you ready to get married? And he said, yes, and I think I'm ready to get married.
GOLDSTEIN: Megan was elated.
MCARDLE: I woke up not even thinking, oh, what would the wedding be like, or whatever. Just thinking, wow, you know. I've got this great guy, and we're going to make a life together, a whole life.
GOLDSTEIN: That feeling did not last. Four days later, Megan's boyfriend said he'd made a terrible mistake, and Megan moved out.
MCARDLE: So I moved back into this tiny, little apartment and - which was sort of appropriately - it was like a cave. And I sat in my cave for about six months and cried.
GOLDSTEIN: She spent a lot of time playing video games and thinking back to what she'd missed in the relationship. One moment in particular stood out. She and her boyfriend were at a bar, and they were talking to someone they just met.
MCARDLE: And somehow the topic of saying I love you came up. And so the three of us are talking and he says to the stranger, well, I won't say I love you until I'm totally sure it's the one. You know, like I've never said I love you to her. I've no intention of doing so any time soon.
GOLDSTEIN: The boyfriend is saying this right in front of Megan to a stranger, and Megan says after the breakup, she couldn't figure out why she had let this moment slide.
MCARDLE: I should have had it out that night. And I didn't, and the end result was that I wasted three years on a relationship that I should've known pretty early on wasn't going anywhere.
GOLDSTEIN: Megan's day job was writing about economics. And at some point when she was sitting there crying in her cave, she realized that she'd stayed in this relationship because of something she wrote about all the time for work, an economic idea called the sunk cost fallacy.
MCARDLE: It's the idea that there a lot of things in life that are like a sunken ship. You've invested a lot of money in it, and now it's gone and you can't get it back.
GOLDSTEIN: The rational thing to do in that setting is to walk away. But of course, that's not human nature. Human nature is to think that ship was really expensive. I should try to get it back. And this is the fallacy. We throw good money after bad, desperately trying to get back something we've lost.
MCARDLE: And that's exactly what I was doing over and over and over again. I just couldn't let go and say, you know what? I invested all this time, and he's great but this relationship is not going anywhere and I have to let it go and go look for one that is.
GOLDSTEIN: This story does have a happy ending. Megan got married to another great guy. She still writes about economics, now at Bloomberg. And she's had some luck conquering the sunk cost fallacy. She recently got rid of a vacuum cleaner that she spent a lot of money on but just wouldn't get the dog hair off her couch. She went out and bought another one. It works great. Jacob Goldstein, NPR News.
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