In this solo educational video, Dr. Jameca Cooper introduces the sunk cost effect (also known as the sunk cost fallacy), an economic concept that has been applied to psychology. She defines it as the tendency to continue investing time, money, or effort into a person, project, or situation because of the amount already invested, even when it no longer makes rational sense to stay. Dr. Cooper links the effect to cognitive dissonance, explaining that people’s attitudes and beliefs must align with their actions, so abandoning an investment feels like admitting a mistake. She illustrates the phenomenon with several real‑world examples: staying in a long‑term marriage to avoid feeling that years were wasted; holding onto losing stocks because of prior financial commitment; remaining in stressful teaching or other jobs after years of training, tenure, or a lengthy hiring process. Throughout, she emphasizes how the perceived loss of prior investment drives continued engagement despite dissatisfaction. The video ends with a call to subscribe for more content that applies economic ideas to psychological contexts and promises future videos on additional applications of the sunk cost effect.
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Hi, I'm Dr. Jameca Cooper. Make sure you subscribe to this channel for more information on mental health, personality disorders, reality TV, and a little bit of news and science research. Today we're talking about the sunk cost effect, or sunk cost fallacy as you might call it. This is a term in economics that has been applied to psychology before, and I want to explain it first and You've all probably been familiar with it, probably felt it at some point in your lives, but didn't know exactly what it was. So what it is, is this whole idea that you've put so much time and energy and invested so many things into some thing, person, or endeavor that you are reluctant to pull out and withdraw from that situation just based sheerly on the amount of your investment. So this also causes individuals to not want to end something, stop something, stop doing something, or disengage because they don't want to feel as though they've made a mistake. Um, it's also very much similar to this whole idea of cognitive dissonance that we see in psychology, which means that basically your attitudes and beliefs have to match up with your actions, right? So we've all felt this before. You can probably think of many times in your life where you felt this or the investment and time you spent in something has kept you in it. In other words, you don't want to pull out because if you pull out, you're going to feel like, oh crap, I made a mistake. I wasted this much time, this much money, this much energy. So what are some examples of that? Ding, ding, ding. I can tell you one. My marriage. My past marriage. Of course, being in a marriage for a long time or many years, you always hear people say, well, I've been married 10 years, 15 years, 20 years., and therefore I've been married so long that I don't want to get a divorce because now I've wasted 10 years, 15 years, 20 years, and what will people say? So it's often the investment of time that makes people more likely to stay in a bad situation even when they don't like it or enjoy it because they don't want to be seen as having made a mistake or being a failure. So in other words, the investment of time keeps them engaged. That's one example of marriage. Another way, or example, you can look at this is finances. So think about people who are active in the stock market. They could be, I know this happens a lot when people watch the stock market, they look at how things are highs and lows, and sometimes they can see a stock going down, down, down, but because they've invested so much time and stuck with it and been committed to it for so long, they kind of ride that ship out even when it's going down. 'cause they don't want to pull out and seem as though they made a bad choice. So this applies to financial decisions like stocks and other things as well. Another area where you can see evidence of the sunk cost effect would be like education, training, and jobs. I hear people saying that teaching is one of those professions where it's getting to be more and more stressful. As a teacher, now you have the responsibility of not just teaching your students, but you almost have to be slightly a mental health counselor, as well, because so many students have special needs or mental health issues. So it puts a lot of responsibility on the teacher, and for that reason, many teachers are reconsidering their commitment to the profession. So, but one of the things that go on in this whole process of, do I want to stay in a job that is so stressful and so overwhelming, is that, look at all the time that I've put into being a teacher— 10 years, 15 years. I'm almost to the point where I will get a good pension. I have a great great schedule. I'm off on weekends. I'm off on summers. People think about the investment, the years of training that goes into that, and then that makes them less likely to disengage. You could also think about jobs you don't like and how long did it take you to get that job. If you applied to 50 jobs and you finally got that job and you started on that job and you assumed that things would be great, but then you get on the job and you realize, I don't even like this damn job., but I— it took me 2 years to get it. I had to go through 5 interviews and 50 job applications. So for all of those reasons and all those steps that it's taking you to get there, it makes you more likely to stay in it. So this is the sunk cost effect, and make sure that you tune in for more videos about it because I'm going to give you more information on how this applies to other areas of your life. In typical fashion of Dr. Jameca Cooper, I try to apply real-world things sometimes things from other areas, like in this one, economics, and apply it to psychology so that you can see the correlation and how all of these things are connected. Hopefully you learned something today. Make sure you subscribe to this channel for more information on lots of things. I'm Dr. Jameca Cooper.
