Maybe a good bit. Here’s what Obama said yesterday during the Senate Foreign Relations Committee’s hearing with Condoleezza Rice about sending more U.S. soldiers to Iraq:
“And essentially the administration repeatedly has said: ‘We’re doubling down; we’re going to keep on going … because now we’ve got a lot in the pot and we can’t afford to lose what we put in the pot.’”
That, friends, is what’s known as the sunk-cost fallacy. Here’s Wikipedia on the subject and here’s a definition from the Skeptic’s Dictionary:
When one makes a hopeless investment, one sometimes reasons: “I can’t stop now, otherwise what I’ve invested so far will be lost.” This is true, of course, but irrelevant to whether one should continue to invest in the project.
While it remains to be seen if Obama has the qualifications to run for national office, it does appear he’d at least be a pretty good gambler if he put his mind to it.
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actually, you double down in blackjack when you have a favorable position, such as cards that total 10 or 11. calculated risks like this and splitting cards is the only way to win at the game. Essentially, the strategy is to increase your bet when your odds of winning are at their highest and decrease or keep your bet low when the odds are lower Otherwise, like most casino games, the house has the advantage.
Now I’m not saying this is the case in Iraq, just that Barack isn’t using the term correctly. The more appropriate poker analogy to sunk-cost fallacy would be continuing to bed with a bad hand because you have so much in the pot already, in the hopes that your opponent will fold or the off chance that you could actually win.
“Double down” sounds better though.
actually, you double down in blackjack when you have a favorable position, such as cards that total 10 or 11. calculated risks like this and splitting cards is the only way to win at the game. Essentially, the strategy is to increase your bet when your odds of winning are at their highest and decrease or keep your bet low when the odds are lower Otherwise, like most casino games, the house has the advantage.
Now I’m not saying this is the case in Iraq, just that Barack isn’t using the term correctly. The more appropriate poker analogy to sunk-cost fallacy would be continuing to bed with a bad hand because you have so much in the pot already, in the hopes that your opponent will fold or the off chance that you could actually win.
“Double down” sounds better though.
In poker, I think the term is being “pot-committed”. One would have invested so much in a single hand that to back out now would not benefit the overall position.
In poker, I think the term is being “pot-committed”. One would have invested so much in a single hand that to back out now would not benefit the overall position.
That’s a great point. Sunk cost errors is one of the top cognitive mistakes I see people make day in and day out. I even see myself make it at least once a week when I wait on the elevator to go to lunch… i’ll stand there for a minute and then cut losses and take the stairs. If I was rational I would just take the stairs OR take the elevator but never stand there for a minute and THEN take the stairs. Actually I guess I do reverse of the Iraq mistake. I am too quick to cut losses when actually nothing has changed about the expected outcome. Hmmm…
That’s a great point. Sunk cost errors is one of the top cognitive mistakes I see people make day in and day out. I even see myself make it at least once a week when I wait on the elevator to go to lunch… i’ll stand there for a minute and then cut losses and take the stairs. If I was rational I would just take the stairs OR take the elevator but never stand there for a minute and THEN take the stairs. Actually I guess I do reverse of the Iraq mistake. I am too quick to cut losses when actually nothing has changed about the expected outcome. Hmmm…
I think the most obvious examples of terrible decisions regarding sunk costs occur every day in professional sports. The “we’re paying this guy millions of dollars so he’s automatically in the lineup every day” logic costs teams over and over again. Instead of bringing in a rookie who may or may not offer more production, they continue to play the veteran because his contract “demands” it.
I think the most obvious examples of terrible decisions regarding sunk costs occur every day in professional sports. The “we’re paying this guy millions of dollars so he’s automatically in the lineup every day” logic costs teams over and over again. Instead of bringing in a rookie who may or may not offer more production, they continue to play the veteran because his contract “demands” it.