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Wednesday, June 9, 2010

Residual Fare

Today I got a lesson on how the traditional theories of sunk cost bear little relation to human behavior.  Sunk cost represents investment (time and money) that has already been spent on a project.  In theory, this cost should not influence your current decisions.  Only the best future course should be chosen, no matter what your past investment.  Human nature seldom operates with such Spock rationality.  A staff member from ICS demonstrated two ways to convert a desktop to a virtual terminal.  In one of the methods, he had personally invested much time and effort.  The other method used commercially produced software that cost $15 per license.  The method he had developed was complex, time consuming, and evidenced some hiccups in operation.  The commercial product was fast and apparently very reliable.  As one would expect, he focused first on the method he had developed and showed some preference for that method.  From my point of view (and I will be doing many of the conversions) I prefer the relative ease and speed of the commercial method.  But of course I have no sweat and toil already invested.  It's easy to be Spock when you've got nothing emotionally to lose.

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