A cognitive bias is a thinking flaw to which all humans are susceptible. They are a product of our evolutionary history. Cognitive biases are definable, and predictable.
That means that people who understand them can use them to manipulate people.
The Sunk Cost Fallacy is especially dangerous, and very commonly exploited by con men.
Sunk Cost Fallacy: Imagine you have a 12 year old car.
One day, the radiator springs a leak and needs repair (say, maybe $300).
$300 is much less than the cost of a reliable replacement, so you do it.
Two weeks later, it's the oil pump ($600). Same logic as before, plus the idea that "I just put $300 into that car, if I sell the car, I loose that $300." So you do it.
Couple weeks later, the transmission goes out ($3000). Well, gotta replace that, otherwise the $900 already spent gets flushed down the toilet, so you're now up to $3900.
Next, the head gasket... Gotta fix that or the $3900 is wasted. Then the engine needs a valve job... and so on...
Other Examples:
A gambler has put $3000 dollars into the slot machine. If they don't keep putting money in, all the money they've already put in is gone, so... KEEP GOING.
A person is in a bad relationship. That person has already put X years into the relationship. If they leave, all that is lost, so... DON'T LEAVE.
You can think of many more. Be aware, though, that scammers and con artists frequently exploit this - an investment scam (start with small amounts, get the mark "hooked", and work slowly up to the big score), for instance.
Or maybe a fake psychic who begins with a small, nominal fee. But the spirits are ANGRY, so each session requires more financial investment...
That means that people who understand them can use them to manipulate people.
The Sunk Cost Fallacy is especially dangerous, and very commonly exploited by con men.
Sunk Cost Fallacy: Imagine you have a 12 year old car.
One day, the radiator springs a leak and needs repair (say, maybe $300).
$300 is much less than the cost of a reliable replacement, so you do it.
Two weeks later, it's the oil pump ($600). Same logic as before, plus the idea that "I just put $300 into that car, if I sell the car, I loose that $300." So you do it.
Couple weeks later, the transmission goes out ($3000). Well, gotta replace that, otherwise the $900 already spent gets flushed down the toilet, so you're now up to $3900.
Next, the head gasket... Gotta fix that or the $3900 is wasted. Then the engine needs a valve job... and so on...
Other Examples:
A gambler has put $3000 dollars into the slot machine. If they don't keep putting money in, all the money they've already put in is gone, so... KEEP GOING.
A person is in a bad relationship. That person has already put X years into the relationship. If they leave, all that is lost, so... DON'T LEAVE.
You can think of many more. Be aware, though, that scammers and con artists frequently exploit this - an investment scam (start with small amounts, get the mark "hooked", and work slowly up to the big score), for instance.
Or maybe a fake psychic who begins with a small, nominal fee. But the spirits are ANGRY, so each session requires more financial investment...
