Sunk Costs and Elevators

Jeff would rather ride the escalator anyway…

The elevator took an oppressively long time to pick me up from the eighth floor today. As I waited and waited – and waited, and waited – I finally gave up and deigned to take the stairs. The stairs. That windy, vertiginous exercise shaft built for fire emergencies. I knew that the second I burst through the exit door the elevator would mockingly ding. Its heavy door would swing open, welcoming some lucky, undeserving cadge into its mirrored bowels. He would descend without a sweat, emerging on the ground floor with a hop in his untested step.

Did I make the right choice? I huffed down the stairs, regretting my decision more and more with every passing floor. Had I waited just one more minute, I was certain, I would have caught the elevator and saved myself the aggravation of second-guessing and regret. So why did I cave and choose the stairs? Was I punishing the elevator for taking too long? Would the elevator ever rue the day it dallied up that automated shaft?

I knew the answer. I had committed an unforgivable economic fallacy: I had accounted for a Sunk Cost when making a decision. Economics 101! A sunk cost is an irrecoverable loss and, as such, should not be taken into account in making decisions about the future. In this case, the sunk cost was the time I had spent waiting for that goddamned elevator to arrive. Every second that ticked by was an inconsequential, though undeniably aggravating, unit of time with regard to the future tradeoff of taking the elevator versus taking the stairs. I should have realized that each passing second was a second closer to that palliative ding. My ever-diminishing wait and the prospect of that sweet, sweet elevator ride was certainly a greater value proposition than taking the stairs. Instead, I forgot the cardinal rule: in economics, what’s past is never prologue.

- Winch

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3 thoughts on “Sunk Costs and Elevators

  1. While I appreciate your effort to connect this with sunk cost, I think you are overlooking the possibility that the delay in the elevator’s arrival in this case may in fact have been indicative of the continued wait you could expect. Thus while an irrecoverable loss should not be considered in future decision, past action that has bearing on expectation in the future can be considered. Suppose, for example, the elevator was broken- waiting a certain length of time should indicate that it will never come. Conversely, suppose you were using the elevator at a particularly busy time for your building, say the end of the day. Then you might be able to theorize based on the size of the building and number of occupants what the expected wait would be and actually calculate how long you would need to continue to wait for the elevator to actually arrive. I’m no expert on econ, so this is just a thought.

  2. Great point, Yonshuk! You’re absolutely right. In this case, however, I had no reason to doubt the functionality of the elevator, nor was I in any particular rush to get downstairs. I was only being grumpy and impatient.

  3. If you’re huffing to walk down a flight of stairs there are probably collateral benefits to taking them over the elevator.

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