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.
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