A Bit of Sunk Cost
On a recent trip to Japan my wife and I experienced a small example of the sunk cost fallacy, which can be described as “the human tendency to stick with endeavors in which we’ve already invested time, money, or other resources even when changing course would be the more logical choice.”(1)
She had booked online a place to stay that described itself as a “love hotel”, thinking there was a typo and what was meant was “lovely hotel”. I was notified by my credit card that we had been immediately charged for two nights. And the confirming email said no refunds. Ummm.
When we arrived at the hotel, it was down a deserted side street. There was no one about, no one at all. The entry was a small, dark area with no staff. There was a counter with a desk phone on it. I picked it up and using my very limited Japanese language, got a staff person to come out in person.
Eventually, we realized that a “love hotel” is a place where Japanese go to have affairs and trysts. Privacy and discreetness are of the utmost importance. I found our situation hilarious. My wife found it seriously creepy, including that we were locked into our room and had to phone the staff to be let out!
We managed to stay one night there, then left and never went back for the second night which we had already paid for. In spite of living pretty frugally, we decided to walk away from the $100 loss.
It was well worth it to stay at a “normal” hotel, eating the bit of sunk cost.