Dollars and Sense

Sunk cost is finding that once we’ve invested in something, we have a hard time giving up on that investment. Thus we are likely to continue investing in the same thing. In other words, we don’t want to lose that investment, so often we throw good money after bad, adding a dash of wishful thinking.

Sunk cost is finding that once we’ve invested in something, we have a hard time giving up on that investment. Thus we are likely to continue investing in the same thing. In other words, we don’t want to lose that investment, so often we throw good money after bad, adding a dash of wishful thinking.

The less attention, the less pain, the more we value something without cause.

It turns out the person we trust the most is—ourselves.

It becomes a cyclical relationship: We’re willing to pay about one dollar because that’s how much the soda normally costs. This is the effect of anchoring. The world is telling us that the price of a soda is about a dollar, so we pay that price. Once we’ve purchased a can of soda for a dollar, that decision stays with us and influences how we deter

They didn’t have to count out bills, per se, but they had to weigh the costs and benefits, charge the bill to their room, contemplate a tip, and so on. Even small items incurred an associated payment, and therefore an associated pain.

When we pay before we consume something, it reduces the pain we feel at the time of consumption.

The trick to this type of market competition (and the key to Dan’s game) is either never to play in the first place or, if we play, to learn quickly when things are not going our way and cut our losses.

It’s hard to pay more for the speedy but highly skilled person, simply because there’s less effort being shown, less effort being observed, less effort being valued.