My Life as the Thrill Kill Kult (thefowle) wrote in strangehonor,
My Life as the Thrill Kill Kult

how long

sometimes it feels like we're desperately trying to duct tape the financial golem back together. i for one hold no great hope our actions will alleviate its poor behavior. how long until we declare that our capitalist system needs a fundamental & thorough restructuring? how long until the monster kills a second time?
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The problem is inertia. We already have so many valuable resources invested into the particular patterns of our system. This creates an interest in maintaining and building on that pattern that exceeds the interest in reforming the more basic structures of our economy.

The problem is that it's difficult to do that without completely resetting the values of your economy, and culture. While I agree we probably need that sort of change, bringing it about so suddenly would surely sow suffering into countless innocent lives.

The question stands, how do you rebuild an already standing house of cards?


August 17 2009, 13:36:00 UTC 7 years ago

Sunk-cost fallacy?
I think you're referring to the sunk cost dilemma in game theory and microeconomics. It's not really a fallacy as much as it is a principle of human behavior.

The participant of a sunk cost dilemma typically makes the decision to remain in an unfavorable situation to justify previous unrecoverable investments. It's not an entirely rational response, but humans aren't entirely motivated by ration. Behavioral economists are pretty sure sunk costs are a real factor in how many firms (including the government) operate.
Ah, I did some research and found a reference to a Sunk-cost fallacy. It seems the fallacy only exists if the probable income of the sunk-cost project is outweighed by the probable income of any alternative option, minus its opportunity cost.

In other words, you're only throwing good money after bad if you can take what funds are left and use them somewhere else to greater effect than you would by continuing the project. And that's seldom easy to evaluate with any certainty. Thus the dilemma.