Categories
Consumer Choice & Behavioral

Opportunity Cost of Divorce

Jerusha and Glenn are over for a party that Amy is hosting and Jerusha takes the time to console Amy on her recent divorce. Jerusha actually points out the sunk cost fallacy and praises Amy for her divorce since it’s better than staying in a marriage that doesn’t make you happy. A classic sunk cost fallacy example is often relationships where one party is unwilling to break up the relationship because of the amount of time they have spent together.

Categories
Labor Principles

Does Jonah Want to go Back to School?

An old college friend of Jonah’s now works at the corporate office for Cloud 9. When he comes to visit, he shows the other employees a video of Jonah doing a presentation, and then brings up the fact that Jonah’s enrollment is still active. Jonah initially quit college because he wasn’t happy there, but he’s not sure if he ever wants to go back.

Categories
Consumer Choice & Behavioral

Nonrefundable Movie Ticket

Glenn wanted to see Saw because he thought it was about carpentry, but he quickly realized it was a horror movie. He wasn’t having a good time and even threw up in his lap, but his wife didn’t want to leave because they paid for the ticket and it was date night. Glenn and his wife should have left if they weren’t enjoying their movie since the tickets were non-refundable, but like many people, Glenn and his wife fell for the sunk cost fallacy.