Sunk Cost Fallacy – Rolf Dobelli

Chapter: Why you should forget the past: Sunk Cost Fallacy.

I was an economic student, so terms like ‘opportunity cost’, ‘full cost’, and ‘sunk cost’ are quite familiar to me. I recently read this chapter about people making decisions based on the sunk cost, which means something that has already be done and should not be considered as a factor when making decisions. The author made use of an example about he and his girlfriend purchasing a $30 ticket, just to find out later that the movies was interesting. The author suggested leaving the theatre, because the $30 has already been paid. The cost involved in making the decision, whether to leave the theatre or not, should only be based on the amount of time that they will waste if they had chosen to continue watching the movie.

It was interesting because a ‘normal’ person would have chosen to stay in the movie theatre, because he/she has already paid the $30, and leaving the theatre would decrease the value of the $30 ticket purchased. In fact, that is a fallacy. When deciding whether you should stay in the movie theatre or leave, the only factor you should consider is the future time. If you continue to stay in the theatre for another hour just to finish watching the movie, your full cost would be the $30 + one hour, assuming that you did not enjoy the movie at all. If you choose to leave, then the full cost would be lowered, the nominal value of $30 only.

So I guess what I am trying to say is, stop thinking about something that has already been done, but rather, think about something that might get worse or better in the future. This is how you become a smarter consumer, and a more rational person.

 

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Social Proof – Rolf Dobelli

Social proofChapter: If fifty million people say something foolish, it is still foolish – social proof.

This chapter is a really interesting chapter, because the author did not choose to go for social beliefs, nor did he go against it, but rather, he picked a neutral stance in viewing social behaviours. In Hong Kong, you might have heard of the infamous Occupy Central or Mong Kok Riot (a.k.a. The Umbrella Revolution). It is quite appalling to know that many teenagers and adults find the action of throwing bricks towards the police as a reasonable or sane act. In their defence, people usually do something extreme, violent, and something that they will regret under an overexciting or rioting condition. Every one will get hyped up, but it’s the fact that some of them still find themselves a hero or a revolutionary symbol that frightens me. They rationalise their actions without considering any consequences or damage they might have done to the society in the long run. When thousands of people do the same thing (i.e. throwing bricks towards the police and setting things on fire, aka being a mob), it doesn’t change the fact that it indeed is nowhere correct, nor is there space for them rationalise or justify such actions. We often believe in something that we see, or the society wants us to see, instead of thinking with our own personal judgment. Yet, we can hardly be blamed, because under peer pressure, or social pressure, you don’t really have a choice. Well, this is what I am gonna say to you all, you always have a choice, but it’s the consequence and the result that you are unsure of if you could bear. Imagine having fifty friends who bully others, and one day they ‘ask’ you to join them with their ‘entertainment’, what would you say? You might think you don’t really have a choice, because you will lose your friends with a simple ‘no’, but I think you do have a choice. Saying no is your option, it’s your choice, and no one is forcing you to say so, not even the intangible peer pressure. All I know for sure is that you are unsure if you could bear what happens in the future without fifty friends standing by your side. You couldn’t accept or bear the sudden change to your life. If you want to be the well-educated person out there in the society full of evilness, I’ll say what the author is trying to say, be the person who thinks clearly and objectively, and do not always follow the social flow.

 

“If fifty million people say something foolish, it is still foolish”

–  W. Somerset Maugham

Swimmer’s Body Illusion – Rolf Dobelli

IllusionToday is kinda special, because I am reading a book called ‘The Art of Thinking Clearly’, written by Rolf Dobelli. the book contains the 99 delusions and psychological errors that we always face. Starting from today, I have decided to write a personal experience corresponding to each error it is written in the book. I would like to thank Mr. Dobelli personally for he taught me how to be a rational and reasonable person, without subjectivity clouding my fair judgment.

Chapter: Does Harvard make you smarter? – Swimmer’s body illusion.

The title says it all, does Harvard actually make you smarter? Mr Dobelli used the example of his friend, who is deciding which sport activity to choose from. His friend chose swimming at last, because of the attractive and muscle-building physique of the swimmers. Well, the illusion is that the attractive physique is what gets you selected to join the swimming team. It’s the other way around.

I study at a famous local secondary school, and it ranks top three in my hometown. There are often commentaries about how my school is the best, and it trains smart and intelligent graduates, preparing them for their future professional career (by professional I mean the jobs with high social status and hierarchy, like lawyers and doctors). Am I a smart kid? I think I am, but does the school actually make me smarter overall? Probably. But after graduating from my school, I realise what Mr Dobelli said was very true and authentic indeed. My school is famous because it possibly breeds smart kids, but it might also because of the children themselves, whom are smart and intelligent since the day they were born. They are already geniuses the day they submitted their application for my school. So does IVY leagues and Harvard matter? Yes to the extent that they give you a big step towards your profession, especially with the career opportunities and internship, but intellectually? I doubt it. With all those other factors kicked out of the equation, no, popularity of the school does not matter as long as you are a smart kid yourself.

“Before you decide to take the plunge, look in the mirror – and be honest with what you see. ”

Rolf Dobelli

 

College, where am I going?

So Do nothing.jpegrecently, I spent months talking and choosing colleges in the States. As an international student, I have difficult time concentrating in both academics and college decisions. Nevertheless, the identity as an international student is what made admission more difficult and competitive in the States. We are to be blamed indeed for pushing up the competitiveness and standards of the colleges. Sorry locals!

I applied to 12 colleges, including the IVYs and the prestigious ones, (of course the heaven-like colleges are included too). It turns out I am not as competitive as I thought I’d be. Well technically, I knew where my SAT score would get me, pretty much nowhere, but God probably pitied me, and decided to send me an acceptance letter from NYU!

I was happy for a second, until I recall the expensive tuition and accommodation fees. Even with the scholarship I am granted with, my parents could barely afford me to study in NYU. I had to give up the offer. Yet, I’ve never blamed God for playing me like a fool, because now I finally realised what I have always wanted to study for – nursing. Thinking about it, I am kinda glad that I didn’t accept the offer from NYU, because they admitted me for Bachelor of psychology, which could pretty much get me nowhere in the near future, especially for a person who would like to emigrate.

Then I got accepted to both prestigious Canadian colleges, McGill University and University of Alberta. Yet, I had to turn down the offer. This time, it’s not because I am financially inadequate, but it’s because they require freshman to study physics and M2 for Bachelor of nursing. It’s more like Bachelor of Science (nursing), which is a completely different program and course.

Now, my future path has finally revealed itself in front of me. Australia – Sydney. I thought I have wasted my time studying the SAT and TOEFL exams, but guess what? Nothing is ever a waste. University of Sydney (USYD) admitted me for Bachelor of Nursing (Advanced Studies) with my SAT scores.

I do believe that things are all destined, and sealed. There is no way to change our future, but how we want to proceed to our destined future. I still remember the time in November when I first applied to Cornell University and the heartbreaking rejection letter I got, come to think of it, it’s pretty dumb for me to actually feel sad. I didn’t believe those people who said “rejection is a part of a self-improvement.” I guess it is true now. From November to now June, these 7 months truly inspired me to become more mature. There is nothing to struggle or stress out with, everything has already been planned neatly the moment you were born. I’ve always wanted to study and live my life in the States, but see where I finally end up in, Australia!

 

I am back!

I am back

Hi guys, I haven’t written anything here for a long period of time. I just finished my public exams, and I am pretty worn out, but guess what? I am back! There are a lot of incidents that happened within these few months, from an argument with my dad about marriage equality to terrorist attacks in England, Thailand, France, The Philippines, and many more. Starting from today onwards, I will become more active in writing my blogs, so I hope you will still stay tuned to my recent articles!

Just a little heads up, so welcome back!