“Individuals commit the sunk cost fallacy when they continue a behavior or endeavor as a result of previously invested resources (time, money or effort)
(Arkes & Blumer, 1985)”
How often have you read a terrible book all the way through just because you have already paid for it or read halfway through it. This is the sunk cost fallacy at play.
Online book stores allow you to preview books — read the first few pages before deciding. But what if you decide you don’t like a book halfway through?
There are two factors that typically contribute to the sunk cost fallacy — one is the effort and time already invested, the second is the actual money already spent.
There is not much one can do about the former, but the financial cost is definitely something that can be addressed. There are two ways to do this.
The easiest is to reduce the cost so that you the consumer don’t have to worry about it when deciding what to do next. This approach however is zero-sum — i.e to benefit you, the creator of the content you are consuming will have to suffer.
Another is a pay-per-use model. You pay only for what you consume. When you decide to stop, you can. But not all media lends itself to this model; books for instance. But what if there was a way to implement pay-per-use for books?
We at FeldsparTech think we know of a way and can’t wait to show you what we have in mind.
Also posted here