The reality of sunk costs
Summary
Culture is built on the stability of persistence. Pop musicians have farewell tours that last for decades. The local print shop is still there, reliably getting the job done. We want things that last. And yet… When it’s time for a company to raise another round of investment, the smart investor treats the new round […]
Original Text
Culture is built on the stability of persistence.
Pop musicians have farewell tours that last for decades. The local print shop is still there, reliably getting the job done. We want things that last.
And yet…
When it’s time for a company to raise another round of investment, the smart investor treats the new round as if the old one never happened. Today, right now, is this the best use of my capital?
And the person at the buffet does the same thing. Right here, right now, which dish appeals the most?
We don’t get tomorrow over again. We can choose to spend it on the best option, not the option we committed to ten years ago.
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