Economic theory suggests that rational decisions should not be made on the basis of sunk costs, that is money already spent and unrecoverable on a project. People’s behavior, however, often is quite the opposite, in that we do make what economists consider to be irrational decisions based on unrecoverable lost resources.
For example, let's say you buy a pair of shoes, get them home and realize they hurt your feet (for sake of discussion, pretend you spilled coffee on the reciept and now can’t return them.) Do you:
(a) wear them because you paid good, hard-earned money for them, or
(b) give them away.
A rational decision would be “b”, because how much you spent on the shoes is now irrelevant to the decision of whether you will cause yourself foot pain. If you chose “a”, you are perfectly suited to be a parent.
|It's hard to ignore all those parenting "sunk costs"|
“get your stuff/equipment/music for the gym/pool/rehearsal, hurry up. Put on your socks. Hurry up now, don’t forget your other stuff/equipment/music! Where are your socks? Bring your homework to do while you wait for your sibling to practice/rehearse/play and don’t forget a pencil, hurry up! Where are your socks? Did you practice today? When are you going to practice? There’s no point in going to lessons if you aren’t going to practice. Go practice. Stop crying, go practice. Forty-five minutes. Yes, all at one time. Stop whining. Hurry up. You won’t die from cold feet.”
Why, in the name of all things chocolate, why would I subject myself to this daily ritual? Yes, I said daily. With four kids, the activity changes, but the process occurs everyday. And this isn’t even to get to school, this is after they get off the school bus.
Because as parents, we think, “I’ve already spent a gazillion dollars on rackets and bats and balls and team uniforms and knee pads and shoulder pads and I’ve bought a piano and a tuba and spent another gazillion dollars on lessons for the past ten years, so dang it – we’re going to keep at it.” According to economists, this would be an irrational decision. (Really, is anyone surprised that parents make irrational decisions?)
According to theory, a rational decision maker would not consider all those gazillion dollars already spent, those are our “sunk costs”; we’re not getting that money back. Our future decisions of whether we are going to register for another season, should be based on the future monetary costs and our desire to continue in the endless loop of prodding little people to activities and pushing them to practice, and the attendant fussing and crying (by all parties). Actually, you would think any decision maker would not subject themselves to the emotional turmoil of getting a kid to practice guitar or learn the words to a song. But then, where would we be without music? (Thanks, Joe Jackson.)
Each week, after the meltdown of getting in the car with all the appropriate stuff, I tell my kids “this is it, this is the last time I’m doing this, if you’re not ready next week, we’re not going.” I think they don’t even listen to me anymore. They know that next week, we will do this again. And the week after that. And the season after that when I sign them up again.
I never said I was rational (or that I passed Economics).