Brexit Metaphor No 142
We, humans, like to think we make rational decisions based only on our present view of the future. In reality, however, our decisions are emotionally contaminated by irrational attachments to the past. This is knowns as the "sunk cost fallacy". If you take out a mortgage and then the value of your property crashes below the value of the outstanding mortgage loan, the longer you have been paying mortgage fees, the less likely you are to do the rational thing and walk away, leaving the property to the bank.
The Concorde supersonic jet project is another example of the sunk cost fallacy: the British and French governments had invested so much in it that they were unwilling to give up on it when it became obvious that the project was a commercial failure. Hence the other name of the "sunk cost fallacy": escalation of commitment.
In a similar way, the 2016 EU referendum should be treated as a sunk cost when viewed from 2019. It did set the political direction three years ago but it should not constrain the options for the future now. Brexiteers insist that a 2nd referendum would be undemocratic. Yet, if the present moment requires another referendum, the sunk costs of the past should not influence present decisions.
Maybe a buoyant future beckons after we've swept away the sunk costs?
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| Concorde (Source: Wikipedia) |
Notes:
1. Timeline: This article is part of a series of original #BrexitMetaphors published daily. A total of 142 have been posted so far and another 19 Brexit Metaphors will be published every day until the planned Brexit date of March 29, 2019.
2. Disclosure: The author has a master's degree in European Integration. He also thinks he knows a bit about business, economics, entrepreneurship, China, history, geography, nature, science and Rubik Cubes.
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