For students of economics and the curious non-economist layman, I previously explained the concept of “sunk cost.” Here is another example, from what I do. Suppose I have worked a few hours on an EconLog post. From my first reflections and draft to the final post ready for publication, through some complementary research, a few editing passes, and the choice of a featured image, I might have spent four or five hours over a couple of days, a high cost since I could have done something else productive or directly enjoyable during that time. Time is short and its opportunity cost high.
Suppose I now reckon that most of my readers will likely find my newly-minted post at best banal. They will not even feel challenged to learn more. They may conclude that they are unlikely to benefit from reading me anymore, which represents a reputation cost for me. In short, I now think that clicking “Publish” will, from now on, carry a net marginal cost for me. It would be irrational to go ahead “because of all the time I spent on it.” Wasted time is a sunk cost that will not be erased by incurring further costs. Past time is gone forever. It won’t be “reimbursed” to me.
I think and hope that I usually don’t succumb to the sunk-cost fallacy. I sometimes delete, as I just did, a post ready to publish.
