This is the final piece in a four part series on decision-making irrationalities common to both love and money.
2002 marked one of the most irrational decisions ever made – my then girlfriend dumped me. ME?! I was sick over the loss of this relationship, I stopped eating and I ate too much, I stopped sleeping and I vacillated between wanting to be by myself and being able to surround myself with enough people who loved me. Every single one of you, whether you have been the dumper or the dumpee or both, can attest to the difficulty of ending a relationship.
Recently scientists set out to determine whether or not the song was right – “Is breaking up REALLY hard to do?” It turns out that it is. A group of 15 people were asked to look at pictures of their ex and in so doing, three areas of their brain lit up – the reward pathway which processes pleasure, an addiction pathway which sensing craving as well as a brain region associated with feeling physical pain. As Emily Dickinson could have told you pre-fMRI scan, “Parting is all we know of heaven and all we need of hell.”
It turns out that we really hate to quit, whether it be in dating or spending money. In fact, psychologists have determined that we are twice as upset about a loss as we are pleased about something positive happening to us. Consider the person in a relationship that is not progressing but who is still loathe to call it off. The problem is what psychologist call “sunk cost fallacy” – once we have ended the relationship, all of the time we spent in the relationship is seen as a bust. If we stay in the relationship, there is always a chance that it might improve, no matter how slight. When we break up, all of the time spent in the relationship is seen as sunk, a waste.
A similar dynamic is at play in some common economic scenarios. A gambler who is down hundreds of dollars, always has the chance of winning his money back, until he stops gambling. An individual who bought a stock at ten dollars and has seen it depreciate may hold that stock until it loses all of its value rather than sell it at $9.50. After all, doing that would be to admit defeat.
No one understands this concept better than the creators of internet games like Farmville. At a time when actual farmers are suffering and real food prices are at an all time high, gaming companies have convinced tens of millions of Americans to spend real money on fake crops. Gamers spend their time and money watering, planting and tending to their digital empires. At various points along the way, they may realize the irrationality of such an endeavor and want to quit. But doing so requires them to watch their hard-won vegetables die on the vine and admit that their previous actions and expenditures were in vain.
Saying goodbye is hard – but no matter if it’s a floundering business venture or a virtual farm, sometimes learning to do so is in our own best interests. Our time and energy are limited and often learning how to say “No” is the best way to say “Yes” to a better tomorrow.
Blaise Pascal has said that “the heart has its reasons which reason knows nothing of” and something similar could be said of the way you handle your money. I’ve spent most of the last four posts advocating for rational decision-making, but part of what makes love so grand is that it sometimes makes so little sense. In a way, the irrationality of love is what makes it so special. If you’re like me, love and loss have taught you a great deal about who you are – and maybe, just maybe that stupid ex of yours has a thing or two left to teach you.