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Have you ever taken an economics class?
If so then the content of this blog post may already be familiar to you. Today I will be looking at rational choice, the concept of sunk costs, and how they can be applied not only to economics but everyday life as well. These concepts made so much sense to me when I read my Economics text that I wanted to share them!

Every time you make or anyone else makes a decision, there will be costs and rewards associated with each choice you can pick.

If for example you are at Dunkin Donuts and trying to decide if you want a glazed chocolate donut. Your cost/rewards might look like this:
Rewards: I love chocolate, My tongue will feel like angels are dancing on it.
Costs: the glaze is sticky, It costs $1, I will be one step closer to being fat.

You are going to pick the option that maximizes your rewards and minimizes your costs. What is the best option for you? What choice will net you the most benefit? Is it more important for you to have a tasty treat or did your new diet tips app make you think twice?

Either way at the end of the day, you made a decision. This is an example of rational choice. Whatever our decisions, we always make them rationally. What about drug users? Are they acting rationally?

My Economics textbook would argue “Yes.” Even in extreme cases humans still act rationally.

What if you saw a man high on drugs jump out the window in front of you. You might say “He clearly wasn’t making a rational choice.” But the truth is he was. In the donut example, I talked about the individual costs and rewards for you eating the donut. The rewards and costs are made from our own sets of information, feelings, and preferences. Many people sometimes incorrectly assume that others will make the same decisions they do because they perceive that others use the same set of information they do.

Initially, you may assume that the man who jumped out the window isn’t rational, but you don’t know if it was or not. You do not share the same set of information. What if the only reason the crazed drug man jumped was to get away from the three-headed dragon monster that was chasing him down the hallway?

If a three-headed dragon monster was chasing you, would you jump out the window? I know I would.

Now that rational choice is out of the way we can start to explain the concept of sunk costs.

Investopedia says that “A sunk cost is a cost that has already been incurred and thus cannot be recovered.”

We make decisions in the present.

Each decision we make should therefore logically be decided by the “Now.” Costs that were previously incurred, already invested, or gained in the past shouldn’t have any weight in your current decision. But never the less, many people do make decisions with these “sunk costs” in mind.

A good example of people making this mistake comes from an article in the Wall Stree Journal. A woman who runs a cat cafe was quoted as saying

“I’ve already sunk so much money into this business, I can’t just walk away,”

When deciding to keep her business open, she should only be concerned about the present and future costs. Sunk costs are behind her. If she does end up factoring them into her calculus then she is making a poor choice. It is in her best interest to limit her rational analysis to just the costs and rewards associated with keeping the store open right now and in the future. Sunk costs should mean nothing.

Hopefully, you have become more informed about these random economic concepts. Since learning about them from my textbook, I know I have applied them in my daily life.

I hope you do too, but only if the rewards for you outweigh the costs.

Blog Plan:

For those of you that were around to read this blog last semester, “Welcome Back! Did you notice how I changed the topic?”

To those of you new to my blog this semester, “Welcome! How do you do? This blog used to be about interviews. (Check out the earlier posts if you are interested.) Now it’s about books.”

The idea behind Good Books: Good Lessons is a simple one.
I talk about a thing I read each week when I write my passion blog post. It could be a thick chapter or just a short book or story. The only requirement I have for myself will be that the reading will be both good enough to recommend and that there will be a lesson somewhere in it. Let’s get started!

Book #1: The Matthew Bible

For this first book, I was going to hit you with some lessons from a book I read over winter break, but something happened today that I simply needed to express in writing.

While I was in the library perusing around (As one often does in a Libary,) I came across a section labeled “Special Collections.” It sounded interesting so I moseyed on in and asked the resident librarian a few questions about the place. It turns out that the Pattee and Paterno Libary’s have received special and rare books over the years and they have been made available for students and staff to check out and read inside of the special libraries commons area.

After the Librarian explained how the simple check out process worked, I sat down at the computer terminal and requested the first thing that came to my mind: The oldest bible I could find in English. Within ten minutes I was seated in front of a book I could scarcely believe I was allowed to touch and that I hadn’t known about half an hour earlier.

The next hour of my time was spent leafing through The Matthew Bible, also known as the “Bugge Bible.” First printed in 1535 the version I was now touching was printed in 1549. I was holding in my hands a 469-year-old book.

A certain reverence fell over me, and not just because it was a bible. I was touching something that had outlived 6 previous generations. It was generations old and ideally would continue to exist for generations to come. By touching it I almost felt as if I was becoming apart of this interconnected story that the book was taking. In that time I held the book It became my duty to keep it safe so that future generations could enjoy it just the same as I had.

I suppose there should be a lesson in this as it is one of my requirements. My lesson is this: you never know what kind of opportunities may show themselves. Always be on the lookout for cool things even when you aren’t expecting any and then if you see one (like an opportunity to touch a 450+ old bible) then do it.

My lesson is this: you never know what kind of opportunities may show themselves.

Now for some fun facts:
1. It is called the bugge bible because in 1535 bugge meant ghost. In the book, the fifth verse of Psalm 91 reads: “Thou shall not need to be afraid for any bugges by night.” In modern versions, it is usually translated to “terror.”

2. In the special collections library, you need to wash your hands, but gloves are not necessary. In fact, they would rather you use your hands. It turns out that when people who aren’t used to gloves use them, they are more likely to rip pages. This is why they want you to be gloveless and have the finest motor skill possible.

 

Recently I have been very sick. It started two weeks ago and slowly progressed to where I am now: Currently in bed with pneumonia.

Today we are going to have a slight diversion from the general hustle and bustle found at the “Interesting Interview” blog. When I was sick I recently I found myself reflecting on an extremely influential book that I had read called “Zen in the Martial Arts” by Joe Hyams.

The book itself is merely a collection of short stories and lessons gathered over the years by Joe Hyams. Many of them are conversations he has had with other people who are masters in their respective forms of martial arts.

“Zen in the Martial Arts” uses each of its short stories to teach a lesson, illustrate a concept, or bring something to light that the reader may not have known. The book is primarily about zen. “Martial arts” is merely the medium through which Joe Hyams learned his lessons of zen.

I would like to go through two of the most influential lessons from that book and how they can be applied to “interviewing” and daily life.

Lesson 1: “I am not going to show you my art. I am going to share it with you.”

Before the book is even entirely underway and into the stories and lessons, Mr. Hyams takes a minute to explain what it is he is doing. Mr. Hyams goal is to “share” his art, not “show.” He goes on to explain that if he were to show us merely, we would become uninterested in his desplay and learn very little. If instead, he was sharing the attitude is now one where it is an exchange. The student should retain more information, and the teacher should improve as well thought their common exchange.

Applied to interviews the lesson is straight forward, make your interviews and exchange. Even if you are just the student, you should be able to influence the discussion’s atmosphere, so that is an exchange, not an exhibition.

 

Lesson 2: “How can I show you Zen unless you first empty your cup?”

 

This is probably the most famous story from this book and if you are familiar with it, good for you.

What follows is a condensed version of the original story.

A university professor once approached a martial arts master to inquire about Zen. It soon became clear to the master that the professor was not interested in actually learning but merely to tell him everything about zen that he “thought he knew.” The master asked that they would have tea. Once they had sat down for tea, the professor watched as the master started to pour tea into his cup, and then continued to pour tea after it was full. The cup started to overflow. The professor shouted “Stop! It’s full. No more can go in.” The zen master stopped pouring and remarked “The cup is like you, overflowing with your own opinions and speculations. How can I show you Zen unless you first empty your cup?

The lesson is clear. If we as interviewers don’t empty our cups before we begin an interview, we may fall victim to the same type of situation. Be prepared for your interviews, but always approach them with an open mind. If we are negligent and fail to clear our minds, the result will be something nobody is happy with.

Catch you on the flip side.

-The Author

 

Dear Reader,

This website is now the home of the blog “The Interesting Interview.”

It is here that I hope to share some sort of interesting interview related information. Whether that is an interview I conducted myself or an interview that has already been done remains to be seen. This blog is merely a place for all things inquisitive when dealing with other people.

Seeing as the interviews that could be discussed on here can be from anyone or anywhere the topics discussed on this blog will vary wildly. The main point of this blog is to share interesting knowledge through the medium of an interview.

Catch you on the flip side.

-The Author