What Can the Film ‘Black Swan’ Teach Us About Sunk Costs?Posted: January 16, 2011 | Author: Greg Linster | Filed under: Economics | 2 Comments »
Last night I was given the opportunity to demonstrate that I understand what a sunk cost is. My girlfriend and I had heard good reviews about the film, Black Swan. I, however, made the crucial mistake of not researching the film before agreeing to attend. Shortly after it started playing I wanted to leave. The film seemed dark, sadistic, and eerie right off the bat, not my cup of tea.
What about the fact that I had already paid for the tickets? In no way could that cost be recovered and theoretically it shouldn’t have been factored into my decision. It wasn’t; fortunately, I was able to make a rationally sound economic decision by walking out of the theater. What makes this scenario more complicated is that my girlfriend later informed me that she was actually enjoying the film; albeit, I don’t understand why. Anyway, our inability to communicate effectively in the theater made the situation more difficult; however, she could sense that I was displeased with the movie in a greater sense than she was pleased with it.
Theoretically, people should walk out of movies all the time if they aren’t enjoying them; however, I don’t think that’s the case in the real world. Evidence from behavioral economics tells us that many people are irrational when making economic decisions because they are loss averse.
I’m left wondering how many people really walk out of movies when they aren’t enjoying them.