Hammertime Day 8: Sunk Cost Faith

post by alkjash · 2018-02-05T01:00:00.503Z · score: 41 (17 votes) · LW · GW · 9 comments

Contents

  Day 8: Sunk Cost Faith
    The Uncanny Valley of Sunk Cost
    Sunk Cost Faith
    Faith in the Past
  Daily Challenge
None
9 comments

[Author’s note: I will be moving future Hammertimes to my personal page to avoid cluttering the frontpage. This one is sufficiently short and probably controversial to leave here.]

This is part 8 of 30 in the Hammertime Sequence. Click here for the intro.

It pains me to begin a post about planning with an announcement about two slight changes of plans for Hammertime:

First, I will be travelling the week after next, so there will be a week-and-a-half intermission between the first and second cycles.

Second, when I sat down to write a post about Focusing, I found myself unable to add anything productive to this excellent post: Focusing, for Skeptics [LW · GW]. Focusing is probably the second most powerful technique I learned from CFAR, so I will return to it in future cycles after more thought.

Instead, I want to write three posts on planning. These are the first steps to becoming the kind of person who can make thoughtful long-term plans and follow through with them.

Day 8: Sunk Cost Faith

One of my main motivations ever since writing The Solitaire Principle is to solve the Control Problem in humans: the problem of making and following through with long-term plans and habits despite new information and, even worse, value drift. I propose that what is commonly known and vilified as the Sunk Cost Fallacy actually exists for a good reason and is a useful first-order solution to the Control Problem.

The Uncanny Valley of Sunk Cost

Related: Sunk Costs Fallacy Fallacy.

Here is the uncanny valley one falls into when one naively cancels out Sunk Cost Fallacy:

  1. You suck at making plans, but follow through with them anyway. You get a moderate amount done by making overconfident and poorly-thought-out plans, and just doing them despite contradictory information.
  2. One day, you learn about the Sunk Cost Fallacy. You decide to be a Good Rationalist and categorically abandon ship on projects that no longer appeal to you. You still suck at making plans. All your plans fail and you get nothing done.
  3. Over time, you learn that you’re not the kind of person who can follow through with long-term projects. You jump from bright light to bright light, captured by the briefest caprice. You don’t remember what it’s like to be diachronic [LW · GW]. Your time horizon shrinks and you stop bothering with plans at all.

There’s an extremely insidious demon hiding at Step 2, related to adverse selection. Over the course of a multi-year (or multi-day, for that matter) plan, all sorts of noisy information can arise. Imagine your valuation of the project to be something like a Brownian motion bouncing around due to new information that slowly converges towards the “true value.”

If at any point the current valuation of the project randomly walks under the Worth It line, you’ll promptly give up the project.

Because of the noisiness of information, following the strategy of “give up whenever it falls below the Worth It line” will make you give up on many projects that actually turn out to be Worth It, just because a long random walk will always usually fall quite a bit below the mean at least once.

And this doesn’t even take into account all the motivated reasoning and other reasons that shiny new projects putter out of momentum.

Sunk Cost Faith

I think the Uncanny Valley above is a serious and common failure mode in the rationalist community, and one that happened to me.

My diagnosis is that one should not fix one’s Sunk Cost Fallacy without first learning to make strong, fault-tolerant plans, and that one cannot learn to make strong, fault-tolerant plans without the data that comes from following through on bad ones. Therefore, the first step towards becoming good at planning is restoring your Sunk Cost Fallacy and use it to follow through on bad plans. This move I dub Sunk Cost Faith – faith that your past self made good decisions. Faith, of course, because it’s entirely unjustified.

If you find yourself in the position described in the previous step, pick up your Sunk Cost Fallacy again and turn it into Sunk Cost Faith. Build yourself into a diachronic person. Follow through on your plans even after they no longer appeal to you. Expand your time horizon to the scale of months and years so that you’re the kind of person who can actually do things.

Once you can actually follow through with plans again, only then can you get better at planning. This will involve explicitly building into your plans defenses against the dark side of Sunk Cost Fallacy, defenses such as unambiguous ejector seats.

Faith in the Past

Today’s exercise is directed at people who find themselves giving halfway on projects too frequently.

Pick a completely useless activity (be creative!) that takes about five minutes, and do it every day for a week with Yoda Timers.

Daily Challenge

Convince me that I’m wrong about Sunk Cost Fallacy and it’s actually just bad.

9 comments

Comments sorted by top scores.

comment by Qiaochu_Yuan · 2018-02-05T23:10:58.062Z · score: 16 (5 votes) · LW · GW

I think you're basically right, although there's also a large and important signaling component: it's in fact good to signal willingness to complete projects if you want people to work on projects with you.

Also, as I understand it, this was exactly C. S. Lewis' attitude towards faith. I don't have a convenient pull quote though.

comment by alkjash · 2018-02-06T00:51:39.191Z · score: 20 (5 votes) · LW · GW

After I took the time to actually think about planning and motivation, I realized that there were a ton of glaringly obvious things I was missing. What you said, but also this thing:

If you're halfway done with a project and most of its value is in the finished product, then it's worth twice as much to finish it than to start a brand new, equivalent project.

I can't believe I never considered this while hopping from half-finished thing to half-finished thing. This observation might be a sufficient antidote to the "dropping things halfway" bug that I don't even need Sunk Cost Faith.

comment by Qiaochu_Yuan · 2018-02-06T18:19:02.700Z · score: 17 (5 votes) · LW · GW

In addition to just the value of having the finished project, there's also the value of learning about how to do the various stages of the project. I can imagine projects where most of the learning happens in finishing, e.g. putting on a stage play.

comment by servy · 2018-02-06T11:11:55.609Z · score: 12 (4 votes) · LW · GW

I'm curious what are the "ejector seats" that you mention in this post and in Day 1 post, that can help with the time sinks and planning. While other concepts seem familiar, I don't think I heared about the ejector seats before. I can guess that those are something like TAP's with the action of "adandoning current project/activity". Looking forward to your Day 10 post on planning that will hopefully have an in depth explanation and best practices of building those.

Thanks for the sequence that focuses on instrumental every-day rationality.

comment by alkjash · 2018-02-06T14:49:14.063Z · score: 16 (4 votes) · LW · GW

Thanks for asking! This is one of the topics I planned to cover in the later cycles.

Briefly, I use "ejector seats" to refer to building into your plan rules for when you're allowed to give up or modify it. For example, you can read Eight Studies on Excuses [LW · GW] and try to develop and precommit to meta-rules for what kinds of excuses you accept for yourself; i.e. "Super Bowl Sunday is not a valid excuse for skipping leg day, but grandma's funeral is." In individual plans, you should take a moment to think about what kinds of happenings and new information you would allow to influence them, i.e. "I will make the preliminary decision to attend MIT, except if Harvard accepts me or another school gives much better financial aid; I have considered all the other factors already and will not think about changing my mind for them."

The point is that every time you break your own rules or plans without having pre-committed to allowing the excuse, you might be left with the nagging suspicion and guilt that you were looking for excuses to give up, or that you're not the kind of person who keeps promises. Ejector seats allow you to minimize the number of times this happens.

I will have to think and practice this a bit before writing about it, probably in the second cycle.

comment by lifelonglearner · 2018-02-05T19:57:06.957Z · score: 10 (3 votes) · LW · GW

I like the analogy you give for why sometimes "toughing it out" can be viable, especially if your estimates are going to be changing over time.

One specific area where I'm sure that the sunk cost fallacy is actually Just Bad, though, is in finance / gambling related matters. It causes people to consistently underperform vs if they had just stuck to some heuristics or something.

comment by tcheasdfjkl · 2018-08-04T18:58:37.987Z · score: 1 (1 votes) · LW · GW

The "Focusing for Skeptics" post doesn't seem to exist at the link you gave anymore. Do you know where I can find it?

comment by tcheasdfjkl · 2018-08-04T18:59:06.042Z · score: 2 (2 votes) · LW · GW

Same for "Diachronic Done Right", it turns out...

comment by lifelonglearner · 2018-08-04T21:59:16.071Z · score: 6 (4 votes) · LW · GW

The original author had them removed. You can find quite a few of them now on Medium instead, here: https://medium.com/@ThingMaker