The most important decision-making rule you learn in business school is still largely misunderstood.
I wonder what he thinks is misunderstood. My experience is that people get it if taught it, and don't if they weren't.
But Bruce is sick and Manfred Mann is substituting for him. You don’t like him so much. But you paid $500 for the seats! Should you stay?
I get the message but this illustrates the trickiness of sunk costs, they're not always so perfectly sunk. In this case most people would probably correctly stay - they're there, dressed, ready to have a good time, a lot of the costs are only partially sunk with lots of residual value.
Leave aside any ticket refunds or rescheduling--and assume you got the tickets for free but were offered the $500 from a scalper. If you really don't have any interest in staying I think most people would shrug and think "easy come, easy go" whether or not they theoretically had an option to turn the tickets into cash.
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I wonder what he thinks is misunderstood. My experience is that people get it if taught it, and don't if they weren't.
I get the message but this illustrates the trickiness of sunk costs, they're not always so perfectly sunk. In this case most people would probably correctly stay - they're there, dressed, ready to have a good time, a lot of the costs are only partially sunk with lots of residual value.
Yeah, I'm not sure I agree with that scenario.
Leave aside any ticket refunds or rescheduling--and assume you got the tickets for free but were offered the $500 from a scalper. If you really don't have any interest in staying I think most people would shrug and think "easy come, easy go" whether or not they theoretically had an option to turn the tickets into cash.