During the Spring Festival holiday, the Chinese people helped the old and the young, rushed to major scenic spots and hotels, and reproduced the grand occasion of "people from the crowd". When people are on the road, many people have this feeling, there are long queues everywhere, and the price is no longer "beautiful", which greatly reduces the play experience. But even so, the vast majority of people will still hold the psychology of "New Year's Day" and "come here", plus air tickets, hotels, tickets, and itineraries have been booked in advance, and they still pay for the holiday premium and insist on completing the trip.
These irretrievable expenses that have already been incurred, such as time, money, energy, etc., are called "sunk costs" by economics.
In everyday life, sunk costs can be found everywhere in influencing people's decisions. When the bus can't wait for the left or the right, you will definitely mutter: keep waiting, I don't know when the bus will come; Don't wait, wouldn't it be in vain to wait for so long before, what if the car really came at a moment's notice? There are also many people who grit their teeth and insist on exercising after getting a card at the gym, which is the sunk cost effect that affects consumer behavior.
Sam's and Costco (Costco) are doing a booming business, and in addition to the unique business model, the sunk cost effect also plays a certain role. Every year, hundreds of yuan of membership fees are paid, and consumers always want to go several more times, looking for cheap and high-quality goods, and trying to "make up" the membership fee through the price difference. The same is true for the "slashing" of some e-commerce platforms, in order to get a certain product for free or at a low price, mobilize people around you to help bargain, and the result is always "just a little bit close, you can bargain successfully", which makes people feel that this is a duck that is about to reach its mouth, and is reluctant to let it fly away like this. In the end, it is actually the merchant who wins, and the maximum communication is achieved at a very small cost.
Nobel laureate economist Stiglitz said that a rational person will ignore an expense if it has already been paid and cannot be recovered regardless of the choice made. For example, if you buy a movie ticket for $7 and watch it for half an hour and find out that watching the movie is a disaster, you should get up and leave the theater immediately and ignore the sunk cost of $7.
Sunk costs are not costs" and "sunk costs do not participate in major decisions", the truth is understood, but in the real world, it is difficult for people to be as rational as economic assumptions. During the annual holidays, it is always difficult for the whole family to make up the time, plan the itinerary with great interest, and rush to the long-awaited destination with joy.
The same is true for a small family and as large as a business. When a disruptive new technology emerges, those companies that already dominate the market do not dare to turn around easily, for fear that they will overturn if they turn sharply. Soaring on the track of new energy vehicles is also an outsider like Tesla, who did not have a huge burden in the past.
When making decisions, you can't keep dwelling on the past efforts, which is what people often call "stop loss". Of course, no one wants to lose. Fortunately, the Internet platform has greatly reduced the information barrier and reduced people's decision-making errors.
By reading other people's reviews and scoring references, you can make decisions such as whether to watch the movie, which attraction and which hotel to choose, etc., to avoid "stepping on the pit". Do a good job of strategy and rational consumption, even if the holiday is crowded, there will be small and beautiful surprises waiting for you. (This article**: Economy** Author: Du Ming).