How many times have you stayed in a negative situation because of an exorbinant amount of time, effort, heartache, or money you’ve already invested? Whether it’s the energy you’ve put into a doomed relationship, time sacrificed to an unrewarding job, or money invested in a losing stock… It’s always difficult to decide when to cut your losses and move on when you have ‘sunk costs’ into something.
People with sunk costs tend to dwell on negative emotions linked to potential losses in the past or future. Researchers have found that a few minutes of mindfulness meditation can bring you back to the objective reality of the present tense which usually leads to a better perspective and smarter decision making.
In a new study, researchers found that just one 15-minute focused breathing meditation can help people make smarter choices—especially when there is a potential ‘sunk cost bias’. The study was a collaboration between researchers from INSEAD and The Wharton School of the University of Pennsylvania.
Andrew Hafenbrack—along with co-authors Zoe Kinias and Sigal Barsade—conducted four studies to test the hypothesis that mindfulness meditation could improve decision making by increasing resistance to the sunk cost bias. The findings of the study are published in the February 12, 2014 issue of Psychological Science, a journal of the Association for Psychological Science.
Mindfulness Meditation Can Break the Grip of “Sunk Costs”
According to the researchers, mindfulness meditation was found to be an effective way to break the cycle of "throwing good money after bad" or investing more of a resource to recoup a loss.
The Gambler captures the importance of not staying in the game too long based on sunk costs. When Kenny Rogers sings, “You gotta know when to hold 'em, know when to fold ‘em, know when to walk away, and know when to run” he is giving excellent advice on the importance of making smart decisions in the present tense and breaking free from the quicksand of sunk costs.
"Most people have trouble admitting they were wrong when their initial decisions lead to undesirable outcomes," says lead author Andrew Hafenbrack. Adding, "They don't want to feel wasteful or that their initial investment was a loss. Ironically, this kind of thinking often causes people to waste or lose more resources in an attempt to regain their initial investment or try to 'break even.'"
For the study, one group of participants listened to a 15-minute recording that led them through a focused-breathing meditation that repeatedly instructed them to focus on the sensations of breathing. The other group of participants listened to a recording that asked them to think of whatever comes to mind, a practice that is not a form of meditation. Both groups were then asked to make decisions based on various sunk cost scenarios.
Hafenbrack and co-authors found that mindfulness meditation—which cultivates awareness of the present moment and clears the mind of other thoughts—may help to counteract this deep-rooted bias. "We found that a brief period of mindfulness meditation can encourage people to make more rational decisions by considering the information available in the present moment, while ignoring some of the other concerns that typically exacerbate the 'sunk cost bias,'" explains Hafenbrack.
Conclusion: Meditation Leads to Smarter Decisions in a Two Step Process
Mindfulness meditation increased resistance to the sunk cost bias in each of the experiments in a two step process. Zoe Kinias explains, "First, meditation reduced how much people focused on the past and future, and this psychological shift led to less negative emotion. The reduced negative emotion then facilitated their ability to let go of sunk costs."
Sigal Barsade concluded, "This tool is very practical. Our findings hold great promise for research on how mindfulness can influence emotions and behavior, and how employees can use it to feel and perform better."
The next time you feel that you might make a bad decision, take a 'time out' to practice a few minutes of mindfulness meditation. You don't have to be sitting in the lotus position or chanting 'om' to make this happen. You can meditate anywhere.
Mindfulness meditation can be a simple three step process: 1. Stop. 2. Breathe. 3. Let go of attachments and just focus on the sensation of your breathing in the present tense. After a few mintues of this—when you have cleared your mind and are firmly grounded in the present tense—you will probably make smarter decisions.
If you’d like to read more on this topic, check out my Psychology Today blogs: