In my last blog post, I wrote about taking one’s time. The flip side of this, of course, is that we sometimes invest too much time (and effort and money) in things that have very little or even negative impact. Why do we do this? It’s simple human nature, according to psychologists and behavioural economists. But that doesn’t make it right.
Psychologists describe this as the sunk cost fallacy: when we invest in something, our emotional attachment to it is such that it becomes harder to abandon it. This may result in an escalation of commitment: we will commit more to this investment, in spite of any previous negative impact, in the hope that it will eventually return positive results.
One of my favourite examples of the escalation of commitment comes from the corridors of power in the Japenese city of Tsukuba.
In 2004, the Tsukuba Municipal Government…
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