the sunken cost fallacy

i’m horrible at gambling.  i don’t gamble because:

  1. i hate to lose money, no matter how small the amount is
  2. i feel like you’re going to lose eventually anyways, and i’d rather get something in return…like shoes
  3. i think i have an addictive personality and i’m afraid of what will happen if i start
  4. i don’t really have any interest

whenever people want to play poker, i always try to convince them to play for punishments instead of money.  i’d rather eat raw egg than lose $5.

and one of the reasons i’m horrible at gambling is because when i play hold ’em, i play every hand.  even when my hand is bad, i always think, but maybe “everyone’s hand is bad” and “you never know”.  i know statistically speaking the odds are against me and my logic is flawed, but i do it anyways.

now, for a different tangent (they’ll come together later, you’ll see)–last year, a friend and i bought some type of groupon deal at a rooftop bar in los angeles.  the reviews for the place weren’t very good (because i always check first), but we bought it anyways.  because of the mediocre reviews and distance we weren’t really too interested in going and never really tried until it was about to expire.  and of course we should go, we paid for it and it’d be a waste not to right?  i ended up not going because i figured the food wasn’t going to be that good so it wasn’t really worth the hassle of driving through la traffic.  we would have inevitably spent over the voucher value anyways so i just ate the cost.  i’m so glad i overcame “the sunk cost fallacy”.  besides the money we saved of what we would’ve spent over, there’s the cost of gas and time.

i normally don’t behave this way though.  normally, i fall for it (especially when it comes to waiting in lines).  and this is really tripping me up on the gmat.  i’ve been struggling with the quantitative section and having a hard time cutting my losses, making an educated guess, and moving on when i’m stuck on a problem.  you’re supposed to only allot about 2 min/question, which isn’t much time.  and i’ve been spending over that time trying to figure out a problem and can’t give up now that i’ve spent that much time and energy on it.

but i need to learn that if i couldn’t solve it in 2 minutes, i probably won’t get the problem right anyways, and just move on.  especially since the gmat penalizes you heavily for not finishing.  i didn’t finish the quant section when i took my gmat last year and it resulted in a score lower than any of the practice tests i had taken before hand.  i had so little time left, that when i realized i needed to start blindly guessing, i didn’t even have enough time to do that.  i think i blindly guessed on 3 questions and still had 2 left when the clock ran out.

bad connie!  and i haven’t learned because as i’m taking practice tests now, i’m still spending more than 2 minutes on questions and still running out of time at the end.  so obviously i have a problem with pacing, so what i should be doing is realizing that i have a hard time finishing and know that i will be guessing on problems so i might as well do them on ones i can’t answer right away.

when i’m running out of time and need to guess, i still feel the urge to read the problems to see if i know how to answer it, because what if it’s something i can answer?  see, what i did there?  that’s my logic when i play poker too.  well, ideally, i should have enough time to at least read all the questions, but if i already have a track record of poor time management, then i won’t be able to do that because i invested too much time on other problems that i probably ended up guessing on.

this is something i really, really need to work on (in addition to beefing up my quant skills), so i’ll really try to take this article written by the princeton review on beat the gmat to heart.  their advice:

  1. remember the experimental questions
  2. think about the questions you won’t get to (this will drive it home for me)
  3. accept that some wasted time is inevitable

One thought on “the sunken cost fallacy

  1. Pingback: gmat tips « studio bokeh

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